Launching a New Product into a Developed Market Although some brands enjoy a rich A research and development team was heritage, the key need in a busy and then asked to develop a number of developed market sector is innovation, product recipes which addressed the not just of existing brands but also in needs expressed by consumers. the development of completely new Not all products successfully emerge brands. Brand-led innovation is a vital from the product development phase. component in the growth of this market Research and development involves Introduction as it enables organisations to build combining various ingredients to competitive advantage. Over recent Established markets generate intense competition during which new and develop potential new products. years, competitors in the chocolate innovative marketing strategies are required and new and existing Considerable development time was market have made significant products are developed. spent on Fuse, carefully engineering investments in new product As a market develops, consumers become more experienced and the ingredients in order to deliver the development. Indeed, over 15% of discerning and look for more benefits from the products they choose. right balance of chocolate, food volume sales in the last ten years have Although some organisations' products may appear unchanged at this elements and texture. More than 250 been generated by new products. For developed stage of a market, the more successful businesses re-work ingredients were tried and tested in Cadbury, this figure is even higher, at existing brands and continue to develop new ones to meet changing various combinations before the recipe 20%, with new brand launches such as consumer needs. was finalised. Wispa Gold and Time Out. In the confectionery business, Cadbury The development of strong brands has always been a feature of the Schweppes is the world’s fourth largest Any new product in the snacking sector confectionery market. This case study focuses on the launch supplier of chocolate and sugar must establish points of difference from of Cadbury’s Fuse. In the face of strong existing products within the market - competition from well-known brands confectionery. The Group has Background to the confectionery market manufacturing plants in 25 countries thus creating a unique selling in an already busy market sector, the proposition (USP) i.e. a product with Per capita confectionery consumption in the UK is among the highest in and sales in a further 165. Cadbury launch of Fuse represented a significant unique appeal which is not shared by the world, exceeded only by Ireland and Denmark. Chocolate Limited is Cadbury Schweppes’ UK investment in a new brand. any of its competitors. Whereas other confectionery accounts for around 70% of sales value in the UK market, confectionery operation and it is confectionery snacking products focus with sales of sweets (sugar confectionery) at around responsible for the production of all of primarily upon ingredients, with 30%. An overview of Cadbury’s best-known UK brands. volume for the company and achieve chocolate used only to coat the bar, the Historically, the chocolate confectionery market has been characterised Market research Cadbury Schweppes the vision of market leadership in every product developers decided to use by the dominance of a number of well established brands, such as The snack market Market research is a process designed Cadbury’s chocolate to ‘fuse’ together Cadbury’s Dairy Milk, Mars Bar and Kit Kat. Cadbury Schweppes is a global segment in which it operates. The role business which manufactures, markets It is not difficult to find out about to link managers to consumers through of innovation is critical as it allows a number of popular snacking and distributes branded products in ‘snacking’. Walk into any newsagent, information. It is used to identify Cadbury to develop ahead of its ingredients such as raisins, peanuts, Top Selling Chocolate Brands crisp cereal and fudge pieces. over 200 countries. It aims to provide supermarket and petrol station and you opportunities and make better informed competitors in those areas of the market before the launch of Fuse pleasure, taste and enjoyment through are confronted by many different types decisions about products which have which are new or growing. 1. Cadbury’s Dairy Milk 11. Cadbury’s Wispa the manufacture and marketing of a of confectionery, as well as different future market potential. Early consumer Megabrand 12. Cadbury’s Time out wide range of beverage and varieties of crisps, cakes, nuts, pies and Market research has revealed that testing 2. Kit Kat 13. Smarties confectionery brands sold to consumers doughnuts. This is the snacking Product development 3. Mars snacks play more of a functional role 14. Cadbury’s Crunchie of all ages. business. ‘Held in the hand’ categories Cadbury set out two objectives for the As products are developed, they must 4. Galaxy 15. Cadbury’s Milk Tray than one of pure indulgence: they are include: development of Fuse: be tested to ensure that consumers 5. Cadbury’s Roses 16. Cadbury’s Creme Egg Cadbury Schweppes employs over often a meal substitute. Research also • Confectionery £4.9bn would be willing to buy them. As 6. Snickers 17. Bounty 40,000 people worldwide. The Group’s shows that successful snack brands in 1. to grow the market for chocolate (chocolate sector £3.4bn) approximately 85% of all new products 7. Quality Street 18. Milky Way strategy is to increase profitability, the confectionery category tend to have confectionery; launched into the grocery and allied 8. Twix • Biscuits £1.7bn 19. Cadbury’s Caramel brand strength and volume on a global more ‘foody’ values and often contain 2. to increase Cadbury’s share of the trade sectors fail in their first year, 9. Maltesers 20. Yorkie basis in its two business streams, • Snacks £1.2bn ingredients such as cereal, wafer, snacking sector. extensive research helps to reduce the 10. Aero Source: A. C. Nielsen Moving Annual Total Value to August 1996. beverages and confectionery, through a • Crisps £1.1bn biscuits, peanuts and fruit to break up risk of launching a new product into an combination of internal growth, The ‘Fuse’ concept was developed already competitive market. Fuse went • Ice Cream £0.8bn. the chocolate delivery. targeted acquisitions and joint ventures. after market research identified the through two extensive ‘in home In the beverages business, Cadbury Snacking is said to reflect the fast pace Cadbury’s philosophy is to continue as growth of snacking and a definite gap placement’ tests. The results of these Schweppes is currently No 3 in global and busy lifestyle of many people in the a driving force in the confectionery in the market for a more chocolatey tests were multiplied into repeat soft drinks, where it licenses its brands 1990s. It is fast, convenient, easy and market, and thus constantly analyse its snack. A number of ingredients were purchase and purchase frequency to bottling partners in 92 countries and mess-free. The key snack consumers, offerings for consumers. The core devised and tested following a survey figures to allow Cadbury to anticipate has its own or joint venture bottling 16-34 year olds, represent 37% of all objective of Cadbury’s innovation which questioned consumers about the volume of bars required for the operations in a further 14 countries. snack buyers. programme is to generate incremental their snacking habits and preferences. launch of Fuse and post-launch. Pack design and repeat purchase. The ‘treat size’ Before consumers could try the There were certain key only exceptions were briefings identify advertisements using and the multi-packs were aimed product, however, it was requirements to the co- with The Grocer, and Marketing prompts in a recall test. The brand name at families. important for Cadbury to gain ordination of the launch: (trade publications) and The Fuse launch had created TASKS & ACTIVITIES the support of its trade A key element of any new • Secrecy had to be Daily Telegraph, which massive awareness of the new Explain what is meant by a Develop three unusual, but cost- customers. Retailers had to product launch is the Brand name paramount! reviewed the product in its brand, achieving greater 1‘developed market’. In your 5effective, ideas for marketing a development of a strong pack view it as helpful in business pages. prompted awareness than the answer, identify the features which new chocolate product to the trade. • Marketers who had design and brand name. Like packaging, brand names encouraging customers to visit celebrated Wispa launch. distinguish a developed market and identified the gap in the Public relations (PR) support play a critical role in the success their shops. If the product had Within just one week of the explain why such markets tend to be The design brief for Fuse had was substantial. It told the story What role does consumer testing of a product, by helping to failed to interest retailers and market had to work closely highly competitive. two clear requirements: of Fuse, explained that it had launch, a record 40 million Fuse play in a new product launch? create a product’s ‘personality’. distributors, the costs of with individuals from 6 taken five years to develop, bars were sold into the trade and How might information from 1. To communicate the dynamic The new product aimed to have investment would not have been research and development as involved an investment of £10 within eight weeks of sale, Working in groups, carry out some consumer testing be used? and slightly wacky broad appeal to 16-34 year olds, met and they would not have well as other external million, the development of a Cadbury’s Fuse was the UK’s 2research about snacking. What are ‘personality’ of the new although it was primarily stocked the product.