Cadbury keeps its ad strategy under wraps

While Cadbury remains tight-lipped about its Paris pitch, observers believe it is seeking a common strategy for a major acquisitions spree.

At Cadbury Schweppes, any changes in marketing strategy are a closely guarded secret.

Last Friday, two London agencies, TBWA GGT Simons Palmer and Euro RSCG Wnek Gosper, were summoned to Cadbury’s Paris offices by international marketing director Alan Palmer to be briefed on the second stage of a secret pitch.

It has been two years since Palmer, former UK marketing director at Cadbury, was promoted to the international role and handed the task of implementing its “master brand” strategy worldwide.

It is a strategy that works well in the UK, where the company sells itself as “the nation’s favourite”.

The company’s policy is all about focusing on the concept of “Cadburyness”, which is carried through all brands – and reflected in its &£10m Coronation Street sponsorship deal with Granada.

In diverse global markets, where the core product does not travel well and has to be adapted to suit local tastes, there is still uncertainty over the feasibility of Cadbury’s umbrella strategy.

Enquiries about the nature of the Cadbury pitch in Paris have been met by a wall of silence.

Two agencies known to have taken part in the pitch are no longer in the equation. Leo Burnett turned down the opportunity because of conflicts of interest internationally – a strong hint that the pitch does not just involve the domestic UK market. Bates, meanwhile, was dropped from the list last Friday.

Agency Assessment is acting as a consultant on the pitch, but remains tight-lipped.

However small the details, this is the first sign of any movement in advertising on a multimarket scale since Palmer’s promotion.

Cadbury is the market leader in the UK chocolate sector. Apart from Commonwealth countries such as South Africa, Canada and Australia, and some emerging markets, the company has always struggled to be a true global player. Although its brands carry the same names in all markets, many come in different packaging and shapes to suit each country’s preferences. This makes it impossible to run a product ad campaign with the same copy treatment.

In the UK, Cadbury markets its products differently to other confectionery businesses. The company uses the same chocolate for all its brands; Mars uses a different chocolate recipe for the Mars bar, Galaxy chocolate and M&M’s.

Cadbury believes its customers will recognise new products as different delivery mechanisms for its chocolate, so therefore it can build master-brand loyalty and boost sales of new products.

By contrast, Mars’ strategy is to make its products compete as brands in their own right, such as Twix, Snickers and Milky Way. This is reflected in the individual ad style for these products.

There is another factor. It is exactly a year since the proposed sale of all Cadbury non-US soft drinks to Coca-Cola. After the deal was accepted by the relevant competition authorities, &£1.1bn was paid to Cadbury at the end of this summer. The company decided to sell the soft drinks division so it could concentrate on building its confectionery portfolio by buying up rivals.

Target companies suggested by analysts include Lindt and Ferrero Rocher. Philip Morris, the US food and tobacco giant, is also understood to be considering putting its Jacob Suchard confectionery business up for sale.

Although Philip Morris denies this, analysts say Cadbury will try to snap up the business if it does come on the market.

Cadbury is considerably cash richer than it was a year ago. Although the money from the sale of its soft drinks arm has been pledged for acquisitions, the company may now be raising its brand profile ahead of a spending spree.

Palmer slashed the company’s UK ad budgets in 1997, when the Coronation Street sponsorship deal was launched, and only a streamlined list of products received ad support.

There is increasing speculation in media circles that Cadbury has agreed to raise its media spend next year, although a new Coronation Street deal has yet to be agreed with Granada.

While implementing the master-brand strategy has been a slow process since he moved across, Palmer has been busy rolling out a portfolio of brands in individual markets.

Williams de Broe analyst David Hallam says: “Cadbury, as a confectionery business, has an international strategy which is split by the needs of its developed and emerging markets.”

Some observers believe Palmer is looking for an agency to devise a common strategy which can be rolled out territory by territory. If they are right, the Paris pitch could be the first indication that Cadbury plans to step up its attempts to become a major global force.

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