#3 Will WOM and WOW out Cadbury?
Cadbury have reduced their 250g Dairy Milk by 20% and are still charging the same. Or will they get away with it? What would you do if your CEO said we’ve got to reduce costs – here is a fait accompli now find out how to market the change. Would you try and sneak it under the radar or announce it? If you sneak it you might not get ‘out-ed’, if you announce you will get a backlash.
How do you mange it then?
Rounding off the GM Conversation:
So first up the GM poll:
- 80% say they will go under
- and 20% say they will float and survive
Either way – what is clear – for those who have been on The Village Square Wordvine Level 1 Course that a key issue for GM, as underlined by the US President was that they lost touch with their market. What we are keen to impress upon marketers is that the true value of setting up a Referral Marketing Network is not just about Referring but more accurate, cheaper and deeper research.
How much do you spend on Market Research? Well take all the qual budget and use it to set up a Referral Marketing Network – that’s one way to fund it.
Cadbury sneaking or putting the consumer first? Here are some facts for you to consider:
Cadbury:
- reduced the size of the 250g Dairy Milk bar by 20%
- reduced the cocoa from 26 to 21% in Australia and NZ
- they have also increased the oil content
- Cadbury were most recently voted most trusted brand in NZ
If you heard about this via WOM with nothing else
Loading ...Cadbury claims that:
- Consumers want chocolate that is easier to eat ie less crumbly
- Hence the chocolate chunks are smaller
- And the oil added makes it easier on the mouth
Whether this is true or untrue is not the key learning here. The key learning is that most people will hear about this via the increasingly adverse consumer reactions to the change. In fact a website has been set up to put pressure on Cadbury to change it back – in addition to a twitter feed.
It will be interesting to see how Cadbury manages this situation and to see what the impact will be on their perception of trust.
We look forward to seeing your votes.
Jake & Cornelis
The rationales behind the size and key ingredient reduction are marketing crap. Made up by ‘creative’ marketeers short of real
innovative and good ideas. Ideas which really generate an added value for consumers.
It is always easier to reduce ingredient costs and replace it with an ingredient that’s cheaper and offsets the taste loss. Very old trick which makes the CFO very happy on the short run. However, actions like this kill the brandequity on the long run.
And ‘the long run’ is much shorter now. Because of the acceleration to the buzz, internet can create.
Victor Neyndorff Holland
ps. Did Cadbury give the cost reduction back to the consumer?
With effectively a 20% price increase and done in this environment, they were always going to come under attack when they changed consumers value equation to such a great dgeree.
Their explanation seems plausible but maybe it needed to be delivered in the form of new shaped bar or smaller morsels using a new pack weight where the combination of a smaller volume and their “mouth feel” story might have met with gretaer success
Lets see what the publics WOM machine does with the issue
“How much do you spend on Market Research? ”
This is a great question. Referral marketing does not nessecarily need to cost money.
best,
Chris O.
Referral Key
“Your Trusted Referral Network”
http://www.referralkey.com/
Hah, another example of companies cheating the public by changing their products, and pretending the only change is the packaging. Like the Sorbent tissues that suddenly feel like sandpaper, or the Country Goodness sour cream that suddenly tasted odd.
Look at Whittakers – good value, good price, and actually manufactured in NZ.
Companies need to learn – no one likes being lied to, and we *do* notice these things.
Hi Jake, for me the thing that seems to be wrong is the bundling up of all of these things. If you are improving the product great bundle things up and announce it as a new product release. But if you are trying to make operational cost savings don’t, repeat don’t do all the things at the same time. Spread them out over 12 to 24 months. Otherwise you risk a WOM revolution – which is what seems to be happening here.
Trying to find Amanda Banfield’s e-mail address to warn her of the impending Dairy Milk Disaster – but cannot find her e-mail address on line. The ‘involvement’ pillar of TVS is not easy but hard and Cadbury point me to get involved with things they want me to get involved with. We TVS want to warn Cadbury of an impending disaster and access is very hard. Jake Pearce.
You and Jake were all over this long before it became big news for the old traditional media barons…well done and more power to WOM !!