Overview Case Three

Overview Case Three

Cadbury's TimeOut: Choc Around the Clock

Damien McLoughlin* and Benoit Heilbrunn

Introduction

Cadbury's TimeOut is the most successful product ever developed and launched by Cadbury in Ireland. The development was by the management of Gadbury Ireland, at their plant in Coolock, Dublin. The product's success came from a combination of technological advance, strong domestic and international market orientation, and

original positioning strategy at the time of launch. Gadbury started manufacturing in Ireland in the 1930s, at a time when the protectionist policies of the Irish government effectively forbade the importation of chocolate to Ireland. Ireland and the United Kingdom's entry to the EEC in

1973 made them an open market for confectionery. The effect on the industry in Ireland was that several indigenous firms such as Lemons (hard­boiled sweets} and Urnies (chocolates) disappeared from the marketplace. The implication for Cadbury Ireland was the need to reshape its manufacturing so that it was pos­ itioned to benefit from economies of scale internationally rather than simply domestically.

Cadbury Ireland us a Partner in Cadbury­Schweppes International Within the Cadbury­Schweppes group, Gadbury Ireland identified its particular strengths and competences, and set out to develop in these areas. The company

identified three technologies in which it felt that it had, or could develop, global expertise. These three areas were:

1. Extrusion. This involves putting one form of confectionery inside another: for example, Cad bury's Eclairs wrapped chocolate in caramel; the Moro bar is a centre of chocolate paste with biscuit encased in caramel and covered in chocolate.

2. Flake chocolate manufacture. Cadbury's Flake is a light, crumbly, melt­in­ the­mouth product positioned in the indulgence section of the confectionery market. The Flake brand is very well established and its advertising is legendary. The brand has been leveraged to include confectionery, catering

*Marketing Ciroup, DCUBS. Duhlin City University, Dublin, Ireland. ** Department of Marketing, Graduate School of Business, UCD, Blaokrock, Co. Dublin, Ireland.

550 • O­vvrview Case Three­ Cadbury's TtmcOut

and ice­cream usage. However, the Flake recipe and process provide unique product properties, which were the key for future development.

3. Wafer making and baking. Wafer is an important part of a number of strong­selling products in Ireland, in particular the 'pink Snack brand'. Gadbury Ireland is the only Cadbury­Schweppes affiliate in the northern hemisphere to manufacture the wafer product.

Building on Core Competences at Cadbury Ireland

From the mid­1970s Cadburv Ireland developed centres of excellence around these core competences. The strong product development process in Cadburv Ireland produced products such as Cadbury's Chomp, Moro, TimeOut and Twirl. Twirl is a two­finger casual chocolate snack based on flake technology. These developments led to a doubling of Cadburv Ireland's throughput and allowed it to develop its brand successfully on both the domestic and international markets.

The PerajMnitive of Cadbury Ireland on the Marketplace Cadbiiry sees itself as a 'range house'. This describes a company that provides the consumer with a complete range of options in ever)' segment of the market. In addition, all Cadburv products bear the distinctive Cadburv logo. The core product of the Cadbury group is Dairy Milk chocolate, which is used in its prod­ ucts and which is also marketed under the Dairy Milk brand name. This choco­ late, which uses fresh Irish milk, has been the basis of success in a great number of segments, Cadbury defines segments on the basis of how customers buy rather than on how a product is made. For example, it identifies products as serving impulse markets, take­home markets or gift usage. This has allowed Cadbury Ireland management to identify a significant consumption pattern whereby the take­borne segment is increasing its share of the confectionery market. This trend is driven by supermarket purchases of chocolate. In addition, they had noticed a certain overlap in the marketplace where brands that were traditionally seen as bars ­ for example, Twix and KitKat ­ were extending their franchise into the biscuit market. The main snack brands in Ireland (see Exhibit 3.1) are as follows:

• KitKat. KitKat was first sold in Ireland in l l >37. It has become one of the most popular brands on the market with in the region of I£l 1 million sales in 1992. KitKat had initiated the move into the biscuit market with the memorable advert debating 'it's a biscuit . . . it's a bar'. This ad showed the product being used in different ways and suggested that it had multiple uses. Nestle­Rowntree, the owners of the brand, maintained this position by heavy advertising and maintaining the price of the product at a below market par level. Usually 2­4p below its main competitors, KitKat is also available in bar and snack­size formats.

Twix. Owned by the Mars corporation, Twix was launched in Ireland in 1968. The effort was made to develop a position for the product in the snack

marker with the advertising slogan, 'Whenever there's a snack gap, Twix fits.' Its packaging format, in a flow wrapper, however, also allowed it to fit into the bar/impulse market segment. The success of Twix has been attributed to its good value­for­money position and the heavy advertising support that it has traditionally received. Total brand sales in 1992 were estimated to he in the region of IS6­7 million. Twix was among the first products to be sold in the snack and fun­size formats.

Jacob's Club Milk. The oldest brand on the market, Jacob's Chib Milk lias been sold in Ireland since the 1900s. It is sold singly and in family six­pack formats. The Club Milk acts as a flagship for a range of different­flavoured.

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chocolate­covered Club biscuits. For example, the Club bar is available in Club Orange and Club Mint formats. The position of Club Milk in the snack market is firmly achieved with the advertising message, 'If you're going to have a cuppa, have a Club.'

• Cadbury's Snack. Since its launch in the 1960s, the Cadbury's Snack brand has grown to lead the chocolate snack market. This domination is achieved through grocery sales, but also includes the important catering market. The Snack comes in three formats, differentiated by the colour of the packaging. The 'yellow' snack comprises a chocolate­covered shortcake biscuit. The 'purple' snack is a sandwich­filled biscuit heavily covered with thick milk chocolate. The third option is the 'pink' snack, which comprises three fingers of chocolate­

covered wafer. Cadbury's Snack is sold in a variety of formats incorporating single bar, multipaeks and treat size. Its combined sales from grocery, newsagent and catering outlets were in excess of Igll million in 1992.