Cadbury Crisis Management (Worm Controversy)
Saturday, July 30, 2011 | 1:17 AM | 0 commentsPenat2 aku cari kes untuk Assignment CMP, atleast aku jumpa satu kes about CADBURY, pasal packaging yg tak elok, sampai coklat mereka dimasuki cacing. eeee. Harap2 pasnih if aku beli coklat takdelah terjumpa benda yang tidak2. haishhh,
About the Company
Cadbury, since 1948 is a leading global confectionery company with an outstanding product range of chocolate, gum and candy brands. With over 50,000 people employed, they have district operations in 60 countries and sell sweets around the globe. Cadbury enjoys a value market share of over 70% - and they are poised in a leap towards quantum growth. With the motto of ‘’spreading happiness’’, Cadbury endeavors to bring many more happy moments in our lives.
The rise of the controversy
A group of people approached the State Commissioner of Maharashtra in early October 2003 to complain about the fact that his chocolate (Batch No 28F3I10703), purchased from a shop Pick and Pay, Vile Parle had worms. The matter was then forwarded to the Joint Commissioner and an inspection of the Talegaon plant was issued. The company that had always prided itself of having a squeaky clean image was in a crisis. Cadbury advertisements went off air for over a month following the controversy.
Effects of the controversy.
· Cadbury India's sales fell drastically at a point in time when the festive season was at its peak. This spelt a major loss for the company. Cadbury, which sells 1,000 tonnes of chocolates during the Diwali festival witnessed a dip of 30% in sales and the share value also fell from 73% in October 2003 to 69.4 per cent in January 2004.
· The sales volume also declined. For the year ended December 2003, the net profit fell 37 per cent to Rs 45.6 crore (Rs 456 million) as compared with a 21 per cent increase in the previous year.
· The controversy also created a deep adverse impact on the company as it gave opportunity to competitors to establish their foothold and take maximum advantage of the crisis.
· A report on the same was sought by the government.
PR rescues Cadburys by using Digital and various other media.
The PR department of Cadbury’s played a very effective role in managing the reputation and keeping up the goodwill of the company. Ad agency O&M, which handles the advertising and PR for Cadbury India's Dairy Milk and 5-star brands, worked on a fresh television campaign in this regard.
The following steps were taken to solve the controversy –
Accepting the mistake
The charges against the company were accepted and full efforts were made to settle the issue by imparting all necessary details to the public. Cadbury went into overdrive to tell consumers that improper storage of perishable commodity like chocolates had led to worm infestation. The task was tedious, however still the Managing Director of Cadbury’s went to media offices around the country meeting reporters, answering hostile queries and patiently explaining the company's stand on the issue.
Unlike the cola companies which were caught in a controversy just a month earlier and displayed an ostrich-like attitude, Cadbury did not go into denial mode. It accepted that there was a problem, which may not have been of its own making, and made a commitment to the consumer that it would plug all possible safety loopholes.
As a result Cadbury improved the packaging and paid more attention to the way its chocolates were stored by nearly 6,50,000 retailers across the country.
Launch of a campaign for precaution
'Project Vishwas' - “Steps to ensure quality & regain the confidence”
A campaign was unvieled 'Project Vishwas', a plan involving distribution and retail channels to ensure the quality of its products. The Vishwas programme was intended to build awareness among retailers on storage requirements for chocolates, provide assistance in improving storage conditions and strengthen packaging of the company's range of products. Cadbury reduced the number of chocolates in its bulk packets to 22 bars from the present 60 bars. These helped stockists display and sell the products "safely and hygienically". 1,90,000 retailers in key states were covered under this awareness programme.
"What we now get in the markets is the most over-engineered packaging for a Dairy Milk chocolate anywhere in the world. All festival packs also come with a tamper-proof outer sealing and improved packaging inside for minimum spoil chance. The new double packaging even for the smallest offering, the 13 gm Rs 5 Cadbury Dairy Milk, has the bar wrapped in aluminum foil and enclosed in a polyflow pack, which is sealed on all sides.
An investment of Rs 25 crore (Rs 250 million) was made on new machinery for the improved packaging.
The company's team of quality control managers, 300 sales staff and workers all over checked over 50,000 retail outlets in Maharashtra. All questionable stocks were replaced with immediate effect.
An Editorial Outreach program with 31 media editors across 5 most affected cities was orchestrated by the agency. Cadbury spokespeople shared the happenings of the events in one-on-one meetings.
The trade and consumers, were reached nationally through a press ad ‘Facts about Cadbury’, released in 55 publications in 11 languages. It presented facts about Cadbury manufacturing and storage and highlighted corrective steps being taken by the company. This was a public statement of the corporate stand on the issue. It was a huge hit online as well.
This supported with posters and leaflets to help them share Cadbury point-of-view with their
customers. A response cell with a toll free number and an e-mail id were put in place to give trade a means to directly contact the company with any issues they faced- reinforcing the company’s commitment to quality.
Cadbury’s also tied up with Mobile2win for their first-ever wireless activity in India. The idea was to not only bring in interactivity via SMS promotion with the desired target group of kids and teens in Southern India, but also reach out to a large number of people in the most cost-effective manner. In addition to this, there was a special on ground promotion had been initiated on 26th & 27th February05 at Food Mall in Chennai, Bangalore and Hyderabad as well as at Big Bazaar and Food Bazaars, Inorbit Mall in Mumbai.
TVC's were broadcast on Cartoon Network and Sun Network also. A 5-second tag on TV and internet gave a chance to viewers and consumers to win Sony Play stations, T-shirts and 1000 VCDs by sending an SMS. Ex - SMS BYTES to 8558. It was a one-month promotion scheme. Huge response was seen during this competition.
One innovative tie -up with Reliance webworld was executed, wherein students across 66 examination boards across the company could access their results on Rworld through their Reliance mobiles. If they passed a message congratulating them on their moment of delight from Dairy Milk was displayed.
Bringing back the trust
The Big B was one of the major highlights roped in by the company to promote the Big C in the chocolate business - Cadbury in India. Indian cine superstar Amitabh Bachchan has signed on to become the brand ambassador of the chocolate major for two years.
The Big ‘B’ FACTOR
The big factor that has pushed up CDM sales is the Amitabh Bachchan campaign. It helped restore consumers' faith in the quality of the product. In early January 2004, Cadbury appointed Amitabh Bachchan as its brand ambassador for a period of two years. The company believed that the reputation he had built up over the last three decades complements their own, which was built over a period of 50 years. AB played a pivotal role in all communication relating to Cadbury's products and brands, be it in print, on television, digital or the great outdoors, the company's managing director Bharat Puri quoted in media reports. With the help of its Public Relations Dept. and advertising agency O&M, a campaign was created which aimed for both rational and emotional appeal.
The various ads that were launched during that period were -
One of the ads showed Bachhan visiting a Cadbury plant, inspecting the systems and processes and finally consuming a bar of chocolate. The taste and quality convinced him that there was nothing with the brand.
He addressed the audience by saying that if one heart and soul is not satisfied, he would not be able to sleep peacefully. After having a bite from a chocolate, he further adds that he was enjoying a peaceful sleep these days. This highlighted the fact that he enjoyed the chocolate and had his heart and soul in it.
The other ad featured Bachhan and his granddaughter to emphasize that the product was absolutely safe for children.
Cadbury stepped up its advertising spend significantly that year to nearly Rs 40 crore (Rs 400 million). With a turnover of Rs 729 crore (Rs 7.29 billion) in 2003, Cadbury has a 70 per cent market share in chocolates and Dairy Milk chocolate has 30 per cent market share, despite competitors like Nestle and Amul.
Cadbury’s, a brand synonymous to chocolates, high quality and immense consumer satisfaction reiterated that all through the 55 years of leadership in India, it has never compromised on the hygiene and quality and consumers welfare was of utmost importance to them. A survey conducted by the company proved that consumers now have long forgotten the controversy and are back to their merry chocolate-chomping ways. Sales gained. Customer satisfaction regained. The credibility was brought back.
The company bounced back soon after the campaign hit the screens. Between October 2003 and January 2004, Cadbury's value share melted from 73 per cent in to 69.4 per cent. The recovery began in May 2004 when Cadbury's value share went up to 71 per cent. The company posted a high double digit sales growth in that year end.
Results and Measurement
· 1.Media Coverage: The media relationship effort helped in making media accept that the infestation was genuinely caused by storage-linked problems and not a manufacturing disorder.
· 2.Sales: Sales rose within 8 weeks of introduction of new packaging and communication. This is a clear reflection of restoration of consumer and hence trade confidence in the corporate brand.
· 3. Image: There was significant upward movement in ratings amongst consumers on parameters like company image, responsiveness of company and behavioral parameters like intention to buy Cadbury chocolates.
· 4."Pappu Pass Ho Gaya" became part of street language.
· 5. The activity contacted 20 MN students across the country and was awarded a Bronze Lion at the Cannes Media awards in 2005.
"Life is always like a box of chocolates. You never know what you are going to get”
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