Small has indeed proved to be beautiful for Cadbury. The company, after finding exceptional success in the launch of small packs of Perk chocolate, has now launched Picnic in small packs of 26 gms priced at Rs 10. The 43-gm packs are still available and are priced at Rs 15.

Cadbury has embarked on a strategy which involves increased consumption of its products through enhanced reach, affordability and visibility, which it feels can be attained by creating new markets, widening the depth of its distribution network and working towards a comprehensive portfolio with brands across all price segments.

On the distribution front, the company aims to increase the number of its distribution outlets from

the present 4 lakh to 5 lakh by the year 2000.

To attain the objectives of affordability, over the past two years Cadbury has been changing its product portfolio from pure chocolate items to confectionery which includes caramel, nuts, raisins and wafers. The aim is to bring down the price line and enter other markets than the purely urban ones.

In line with this, it launched Googly in early 1997, and followed it up with products like Mocka and English Toffee.

The strategy of the company has been to launch one major product and follow it up with smaller products, for instance, the launch of Picnic was followed by Cadbury Gold and a couple of sugar confectionery launches.

Intense competition from Nestle is one of the reasons Cadbury has reworked its product range and made efforts to enter the mass product segment. In 1998, the company moved into smaller sized versions of Diary Milk and Perk and found to its delight that the introduction of economy priced models led to more people eating chocolate. In the same year, small packs increased chocolate volumes of Cadbury by 19 per cent and market share to 70 per cent from 69 per cent in the previous year.

Cadbury now has a market share of 70 per cent of the chocolates market. It manufactures chocolates, sugar confectionery and malted drinks. Chocolates constitute 71 per cent of the total turnover, malted drinks 22 per cent, and sugar confectionery 7 per cent.

Nestle, with a 20 per cent share in the chocolates market, is expected to respond with Munch, a chocolate brand meant to counter Picnic.