CADBURY-MARKETING RESEARCH BENEFITS:

We (not to forget I am a student from Alliance, Bangalore) had a class on marketing research taken by Mr. Narasimha, former GM of Cadbury marketing team. He spoke about the various facets of Marketing research and its implications on companies.
He said Market research is the gathering, recording and analyzing of information about markets and their probable reaction to product, price, distribution and promotion decisions. He gave us a plethora of examples from his professional life in the field of marketing.
Cadbury had exceeded its target expectations in 1997 (target-380cr, achieved-427cr with marketing expense of 62cr). With these positive results, management increased its target to achieve 540cr in 1998 by increasing its marketing expenses. The brand manager was provided 90cr as the marketing budget to achieve the target. But the Brand manager asked for a month's time to make a decision regarding the budget plan. He approached a Marketing research team to find how much budget he needs to spend to achieve the target.
The Marketing research team had come up with some interesting points. The correlation between the Advertisement and brand recognition was 0.9, between Advertisement and visibility was 0.95 but between Advertisement and purchase intention it was 0.3. From this data, it was clear that advertisements do not have a major influence on purchase. Again he asked the research team to find out what influenced people in buying the product. From the research they found out that the visibility of product has a positive effect on purchasing decision. In India most of the shopping is done by Women and interestingly the most exciting moments of their life do involve shopping for something. When they are accompanied by their children for shopping, there is always pressure to purchase chocolates. In order to avoid getting disturbed in their shopping experience, first thing they do is buy chocolates that are visible to them. So the visibility has an effect on the sale of the product.
Considering the data, Cadbury's brand manager had spent less on the advertisements and spent nearly 12cr on increasing the visibility of the product in retail shops. By following this Cadbury had made Rs.700cr in sales, which had surpassed their target sales of 540cr. The marketing expenditure spend was 50cr compared to 62cr compared to last year’s expenditure. From this any management student can learn that the decision we take as managers should have data to support.