Know-How Exchange : Student Questions

Hi,
This is a long one and I am hoping the venerable experts of KHE are up to it. I am expecting some indepth answers and an extremely productive and rich discussion. A caselet designed by me based on facts:

A few months ago, Cadbury India faced a major crisis in the Indian market. The FDA in one of its inspections found worms in Cadbury's chocolate bars and conducted raids in different shops and found a similar problem in many other places.
This news was covered by national television, thousands of boxes of Cadbury's were confiscated and there was a sharp drop in the sales of Cadbury chocolates.
Until now Cadbury was the biggest player in the Indian markets and controlled more than 70% of the market share and was doing great. This incident helped its competitors eat into Cadbury's market share, however, they did not use it to gain publicity as the entire chocolate industry had been put under the microscope and they too could suffer.
Cadbury clarified that the worms were not because of bad manufacturing practices or substandard goods but due to bad storage at the retailers outlets. It immediately launched a campaign to counter this damage to its brand image and hired the biggest and the most respected celebrity in India, Bollywood Star Mr. Amitabh Bachan as their brand ambassador. Initially there was a extensive print campaign which just had a body copy about Cadbury's commitment to quality standards and highlighting its world-class manufacturing facilities.
Then, in the television ads which were in a testimonial format, Mr.Amitabh Bachan spoke about how when he had been approached by Cadbury's to be its brand ambassador, he first wanted to confirm whether Cadbury actually uses world-class manufacturing practices and how he went to their plant to check this. (the visual shows Mr.Bachan being given a tour of the plant which is completely automated etc.) The ad goes on as Mr. bachan say that After confirming that Cadbury is actually using the best manuf. facilities, he decided to speak for them. He then mentions how he has been enjoying the cadbury bar since he himself was a kid.
These ads also advertised the new double-packing of cadbury chocolates which would prevent any damage being done to them.
Cadbury also decided to check the storage facilities at all retail outlets and provide their own storage-cum-display boxes.
A series of such ads later, cadbury now has started moving back to its pre-controversy style of advertising but still uses Mr. Bachan. It has clearly come out of the storm.

I have wondered about this case since the past few months and thought it was a rather interesting one. My questions to the KHE experts are:

1. Using Mr.Bachan was obviously very expensive as he charges more than 2.5mn dollars for any brand he promotes. Could there have been a cheaper solution. Was using a celebrity the only or the best option?

2. How should a brand deal with such a crisis? I think Cadbury did a fantastic job. What is your opinion?

3. If any of you experts were the competitor of cadbury, would you have used this incident as an oppurtunity to gain market share?

4. Cadbury's decision to monitor storage of its products at retail outlets is not easy to stick to as in India, supermarkets are not prevalent and chocolates are sold by mom-and-pop outlets and shops which may be as small as 4 sq. foot and are in thousands in any one state alone. In rural areas too, it will not be easy to sustain such an exercise and will be expensive. Should Cadbury try some other strategy to maintain quality standards at retail outlets?