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Old hands at Cadbury's have a strong sense of deja vu. The last time their organisation went into overdrive was in 1991-92 when Nestle launched its chocolates in India.

Till then, Cadbury's had been the undisputed leader in the business in India. To ward off competition and parry falling volumes, Cadbury's famously changed the rules of the game by targeting its largest brand, Cadbury's Dairy Milk (CDM), at adults instead of children. It was a prominent and elaborate shift with a new campaign, expensive packaging and new products. That move helped keep Nestle at bay for two-and-a-half years. Cadbury's held on to its market share of 76 per cent against Nestle's 10 per cent till 1996.

But that was then. Today, for the second time in less than a decade, this 52-year-old confectionery company is in the throes of a significant strategy overhaul that is seeing it moving back to its old stamping ground: the juvenile market. "I think they are trying to go back to the children through the back door," says a former Cadbury employee.

Why this great leap back? Although Cadbury's performed well last year - gross sales were Rs 428.3 crore, up by 21 per cent and net profit was Rs 26 crore, up 27 per cent - there were signs that its repositioning wasn't working as effectively. By 1997, chocolate volumes had dropped from 11,377 tonnes in 1996 to 11,353 tonnes. In 1998, volumes rose again to 13498 tonnes. In 1997, Cadbury's market share had dropped to 68 per cent while Nestle's had risen to 24 per cent.

The shift in stance

To be sure, the decline is also an acknowledgment of growing competition and a fundamental shift in the nature of the confectionery business. The Kit-Kat threat to CDM comes just as the crowds are growing in almost every segment of the confectionery market. By next fiscal, the $ 22 billion Mars is expected to start operations.

In the sugar confectionery mass market, where Cadbury's sells eclairs and sugar candy, which account for 13 per cent of the turnover, recent entrants like Perfetti, Generale Di Confeteria and Warner Lambert have become very aggressive. Each one of these companies has a brand that has either crossed or is very near the Rs 100-crore turnover in about four years.

All this is happening just as Cadbury's wants to increase its consumer base from 5 million to 6.15 million in a year. Doing this requires moulding its products and distribution set-up to maximise opportunity from the basic nature of the confectionery market - impulse purchase.

To do this, Cadbury's has essentially borrowed an idea from shampoo manufacturers: small packs. The packs were launched in December 1998.

These are basically low-unit price products - Rs 5 for a Cadbury Dairy Milk, Rs 7 for a Perk, Rs 6 for a Five Star - at roughly half the size of regular packs. These are the most popular brands in Cadbury's portfolio and therefore are the natural choice for increasing volume growth. Like sachet shampoos, which are intended to convert non-users, these small packs are intended to induce consumer trial and increase consumption.

To follow exactly how Cadbury's expects the small packs to rejuvenate the juvenile market requires understanding the weaknesses of the 1991-92 repositioning. As Rajeev Bakshi, then vice-president, marketing & sales, argued, unlike the West where chocolates were considered an indulgence both for children and adult, research had shown that adult Indian chocolate eaters tended to have a guilt complex. Most of them bought chocolates for their children and then ate a part of it on the sly.

Children, are you with me?

The "Taste of Life" series of advertisements, designed by Ogilvy and Mather, were intended to rid the Indian chocolate eater of that guilt complex. The advertisements suggested, though not in so many words, that it was OK to be