Page 74 - DMGT550_RETAIL_MANAGEMENT

Unit 4: Retail Buying Behaviour

Studying consumers Notes
Sunil Taldar, director, sales and international business, Cadbury-Kraft Foods, said the
focus on behaviour of consumers in shops is important because they make the final purchase
decision there.
“How your product is positioned, its packaging, pricing etc. goes a long way in determining
whether they will buy the product,” said Taldar, who has worked with Cadbury for more
than a decade in different markets, including China, and moved to India last year to head
sales for the combined Cadbury-Kraft business.
Cadbury-Kraft Foods, an unlisted unit of US food major Kraft Foods, which in 2010 bought
Cadbury, has been able to drive incremental sales growth of over 10 per cent in the last
one year, helping it achieve a 40 per cent growth in sales during the first nine months of
2011, said Taldar. The company worked furiously last year to integrate Kraft brands such
as Oreo and Tang into the strong Cadbury distribution system in India. For calendar year
2010, Cadbury reported net sales of ` 2,652 crore - a growth of close to 30 per cent over the
previous year.
The 50,000 outlets Cadbury-Kraft is focused on in India stock one or more of these products:
chocolates which include Cadbury Dairy Milk, Celebrations, Bournville, 5 Star, Perk, and
Gems; confectionery such as Bubbaloo, Eclairs, and Halls; biscuits such as Oreo and powdered
beverages that include Tang and Bournvita.
Taldar said the company has put in place consumer promotions within stores in key
categories such as chocolates and biscuits to help drive sales at these outlets.

While the combined Cadbury-Kraft business remains smaller than other strategic markets
within Kraft Foods, which recently announced that it was splitting into two - a $32-billion
snacking powerhouse and a $16-billion grocery business - India is still key. Irene Rosenfeld,
chairperson and chief executive of Kraft Foods, who visited India in November 2011, said
that she is keen to see the Indian business emerge as one of the top five food companies in
the country.
Cadbury-Kraft’s main rivals include key food companies in India, such as Nestle, which
own Maggi and Kit Kat; Britannia; HUL, makers of Knorr, owners of Kissan and Bru; Parle
Products, ITC and GlaxoSmithKline with its Horlicks, Viva, and Maltova brands.

Like most of its rivals, the bulk of Cadbury-Kraft’s sales come from traditional retail
stores. Modern trade or organised retail constitutes only one per cent of its universe, but
the company is keen to push this number up, given that packaged foods as a category
show greater traction in such retail outlets.
Cadbury-Kraft is banking on technology, much like HUL, to help it replenish stock quickly
at stores, both traditional and modern. “We have upgraded the frontline sales force with
handhelds to capture store orders, which are linked to the distributor billing software,”
said Taldar. “Distributors are linked to company portals to manage auto replenishment of
inventory.”

The Mumbai-based company is looking to increase its retail footprint beyond the over
700,000 stores in 5,200 towns that it now reaches. This number will be ramped up this year,
especially in rural areas, said Taldar.
Question:
Why do you think Cadbury-Kraft want to study consumer behaviour inside stores?

Source: Business Standard

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