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 important for Cadbury to gain the support of its trade customers. Retailers had to view it as helpful in encouraging customers to visit their shops. If the product had failed to interest retailers and distributors, the costs of investment would not have been met and they would not have stocked the product.
Cadbury conducted one-to-one briefings with over 70 key trade customers. This helped Cadbury build awareness and commitment to the launch and obtain significant orders for in-store displays and merchandising ahead of the launch date. The trade commitment was reflected in high levels of display support in store during the launch.
Traditionally, new confectionery products are initially launched in one region of the country, in order to gauge the product's success, before moving on to other regions over a period of time. Time Out and Wispa Gold, for example, were launched in this way. The commitment to the success of Fuse was so great, however, that it was Cadbury's first completely national launch for 20 years.
There were certain key requirements to the co-ordination of the launch:
Secrecy had to be paramount!
Marketers who had identified the gap in the market had to work closely with individuals from research and development as well as other external agencies.
Manufacturing operations, in conjunction with marketing and finance, had to evaluate a new factory investment for Board approval.
Having a catchy 'hook' for a new launch helps to make consumers notice the product. Cadbury and its trade customers managed the first availability of Fuse around one day, Tuesday 24th September, aptly christened 'Fuseday'. This involved tight management of stock distribution, with more than 40 million bars being moved from Cadbury depots into the trade only a few days prior to the launch date.
Press releases were tailored to specific audiences. In each case, a strict embargo was imposed to ensure that the impact of Fuseday was not diluted. The only exceptions were briefings with The Grocer, and Marketing (trade publications) and The Daily Telegraph, which reviewed the product in its business pages.
Public relations (PR) support was substantial. It told the story of Fuse, explained that it had taken five years to develop, involved an investment of £10 million, the development of a new plant at Somerdale near Bristol and £4 million in advertising costs. The TV campaign and PR campaign were so successful that Cadbury was under pressure to meet repeat orders post-launch!
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% with 19% 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 research volunteers to identify advertisements using prompts in a recall test. The Fuse launch had created massive awareness of the new brand, achieving greater prompted awareness than the celebrated Wispa launch. Within just one week of the launch, a record 40 million Fuse bars were sold into the trade and within eight weeks of sale, Cadbury Fuse was the UK's favourite confectionery line, outselling both Mars Bar and Kit Kat by 20% and capturing an astonishing 6.5% of hand-held confectionery product sales. It had also contributed significantly to Cadbury's growth in 1996. The launch had exceeded expectations, with consumers buying 70 million Fuse bars within the first three months of its launch.
Cadbury's competitors reacted to the success of Fuse by increasing their own new product activity.
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 big opportunity to expand the chocolate market even further. As Fuse moves through the growth phases of its product life-cycle, the next stage is to move it into the 'super brand' league. As it does so, the key requirement will be to maintain the product's momentum by continuing to develop innovative approaches to marketing it to consumers.
Our thanks to: The Times Newspaper Limited and (c)MBA Publishing Ltd 1997.
Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the clients can be held responsible for errors of omission or commission.