Launching a new product into a developed market
A Cadbury Schweppes case study

Page 1: Introduction

Established markets generate intense competition during which new and innovative marketing strategies are required and new and existing products are developed. As a market develops, consumers become more experienced and discerning and look for more benefits from the products they choose. Although some organisations' products may appear unchanged at this developed stage of a market, the more...
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Page 2: Background to the confectionery market

Per capita confectionery consumption in the UK is among the highest in the world, exceeded only by Ireland and Denmark. Chocolate confectionery accounts for around 70of sales value in the UK market, with sales of sweets (sugar confectionery) at around 30 per cent. Historically, the chocolate confectionery market has been characterised by the dominance of a number of well established brands...
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Page 3: An overview of Cadbury Schweppes

Cadbury Schweppes is a global business which manufactures, markets and distributes branded products in over 200 countries. It aims to provide pleasure, taste and enjoyment through the manufacture and marketing of a wide range of beverage and confectionery brands sold to consumers of all ages. Cadbury Schweppes employs over 40,000 people worldwide. The Group's strategy is to increase...
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Page 4: The snack market

It is not difficult to find out about 'snacking'. Walk into any newsagent, supermarket and petrol station and you are confronted by many different types of confectionery, as well as different varieties of crisps, cakes, nuts, pies and doughnuts. This is the snacking business. 'Held in the hand'. categories include: Confectionery £4.9bn (chocolate sector £3.4bn) Biscuits...
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Page 5: Market research

Market research is a process designed to link managers to consumers through information. It is used to identify opportunities and make better informed decisions about products which have future market potential. Market research has revealed that snacks play more of a functional role than one of pure indulgence: they are often a meal substitute. Research also shows that successful snack brands...
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Page 6: Product development

Cadbury set out two objectives for the development of Fuse: to grow the market for chocolate confectionery to increase Cadbury's share of the snacking sector. The 'Fuse' concept was developed after market research identified the growth of snacking and a definite gap in the market for a more chocolatey snack. A number of ingredients were devised and tested following a survey which questioned...
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Page 7: Early consumer testing

As products are developed, they must be tested to ensure that consumers would be willing to buy them. As approximately 85 per cent of all new products launched into the grocery and allied trade sectors fail in their first year, extensive research helps to reduce the risk of launching a new product into an already competitive market. Fuse went through two extensive 'in home placement' tests. The...
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Page 8: Pack design and brand name

A key element of any new product launch is the development of a strong pack design and brand name. The design brief for Fuse had two clear requirements: To communicate the dynamic and slightly wacky 'personality' of the new product and create interest at point-of-purchase (i.e. in store). To bring the brand name to life by communicating the fusion of Cadbury's chocolate with the snacking...
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Page 9: Further consumer testing

Testing is vital throughout the entire product development process. It helps to provide valuable information that can be used to fine-tune the product and minimise many of the launch risks. In research, Fuse scored higher for texture, 'interesting eat' and combination of ingredients, than its competitors and achieved the highest rating ever for a new Cadbury product - 82 per cent of consumers...
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Page 10: The launch strategy

The launch strategy of any new product is critical. Cadbury has two targets for its products - trade customers who stock the product and consumers who buy it. In recent years, product launching has become an art which can make or break a product. A successful launch makes potential customers aware of the new product and keen to try it. Before consumers could try the product, however, it was...
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Page 11: Post-launch results

After a new product launch, it is important to analyse whether the product has managed to meet its launch objectives. During 1996, the chocolate market grew by 9 per cent with 19 per cent of this growth attributable to Fuse - a single brand which had only been available for a quarter of the year. One way of evaluating the effectiveness of advertising and promotional campaigns is to ask market...
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Page 12: Conclusion

This case study has examined Cadbury's ability to use innovation in a developed and crowded market-place. There were three clear elements in this process: the use of consumer research to identify a significant market opportunity product research and development combined with extensive consumer testing massive trade and consumer hype generated by a national launch. Snacking remains the...
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