Cadbury Case Study

1.0 Introduction

1.1 Purpose

The purpose of writing this report is to analyze the case study "Chocolate consumers feeling guilty for the wrong reasons" and apply the relevant marketing theories and concepts into the report.

1.2 Summary of Case Study

This case study states about the risks a company will be facing if it is doing business against the ethical marketing policies. Cadbury was practicing the unethical marketing policies by changing the key ingredient from cocoa to palm oil in order to cut down the cost of production while on the other hand, the company was trying to build an ethical brand platform by announcing that it would shortly be using the Fairtrade logo. It is also being mentioned in the text that how important it is to understand consumer behavior in relation to ethical marketing. Specifically, the case study shows how consumers will react towards the unethical marketing practice just like how consumers reacted towards Cadbury's incident.

1.3 Marketing Theory

The relevant marketing theory being applied in the case study is consumer behavior. Consumer behavior is defined as 'the analysis of the behavior of individuals and households who buy goods and services for personal consumption.' (Elliot, Rundle-Thiele & Waller 2012, p. 113) Consumers purchase products based on their wants and also needs. In this case study, psychological characteristics such as motivation, perception, learning and as well as other characteristics are said to influence consumer behavior on their purchase of goods and services. Besides that, self-concept which is under personal characteristics also influences consumer decision especially the younger consumers as being mentioned in the case study. Another marketing theory included in the report is branding. Having a brand name is important to identify one item. Most consumers will choose a reputed brand over an unknown brand.

2.0 Problems Identification

The problem aroused in the case study is that Cadbury did not understand about the consumer behavior. The company neglected about what the consumers would think or feel when it changed its key ingredient to palm oil which actually made the consumers reacted negatively towards the company's product. Consumer behavior has a huge impact in consumer purchasing decision as Whitmarsh and Palmieri (2011) mentioned that context and attribute-variables including environmental preferences can influence purchasing decision. There are also other psychology and behavior perspectives such as self-concept and motivation which will be further discussed in the next section.

3.0 Analysis

3.1 Motivation

Basically, the reason people eat chocolate is to satisfy their needs or wants. Needs are necessary for a person to live while wants are just what a person desires for. In this case, chocolate is considered as needs since it is categorized as food and without food, one cannot survive. Consumer behaviour is the key to recognize the wants and needs of the consumers. Based on Maslow's hierarchy of needs, it is suggested that lower order needs have to be satisfied first in order to achieve the higher needs. (Maslow 1943) Cadbury failed to recognize the needs and wants of the consumers and during the same moment, also failed to understand the consequences of changing the key ingredient from cocoa butter to palm oil therefore ended up creating dissatisfactions among the consumers.

3.2 Beliefs and Attitudes

Cadbury is a well-known brand. Aaker (1996) stated that a strong brand image will develop positive attitudes and feelings in consumers and at the same time also transfer these feelings to the enhancement of that certain brand value to increase customers' perception value. Consumers perceived Cadbury as a safety and ethical brand all the time. Thus, when the problem of Cadbury changing the key ingredient aroused, the consumers were excited because they did not believe that a well-known brand would go for an unethical marketing behaviour. It is stated that once the relevant brand image has been created in consumers' minds, companies have to spend large sums of money to change the image in consumers' minds whenever there are anything negative impacts on that image. (Chen, Chen & Huang 2012) The incident created a bad image for Cadbury and left a bad impression for the consumers. Hence, there were negative press reports about Cadbury and New Zealand's palm oil campaigners also boycotted Cadbury. These were appeared to influence the consumer behaviour towards it so that it changed the consumers' perception