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The Existing Promotional Mix Help Wrigleys

2029 words (8 pages) Essay in Marketing

02/05/17 Marketing Reference this

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The introduction introduces about the Wrigley, history of Wrigley and background of Wrigley. It establishes the aim of this report as formulation of a product line mix strategies to increase sales in Mumbai. The William Wrigley Jr. Company was founded on April 1, 1891 originally selling products such as soap and baking powder. In 1892, William Wrigley, Jr., the company’s founder, began offering chewing gum with each can of baking powder. The chewing gum eventually became more popular than the baking powder itself and Wrigley’s reoriented the company to produce the popular chewing gum. The Wrigley Company works hand-in-hand using dental professionals to help promote better oral healthcare by investing from support programs for the dental team and the wider community, from addition to developing new products to meet today’s oral health needs. The strengthening of partnerships and collaboration between dentistry, dental science and commercial companies helps create supportive environments for promoting oral care today, to help achieve better oral health from the future. As a global company, Wrigley has the ability to reach millions of members of the public beyond those who actually have a dental appointment. Probably no other oral care products are available to the consumer from so many different locations as chewing gum, plus its modest price means almost everybody can afford to buy it.

The company currently sells its products in more than 180 countries. The difficulty faced by Wrigley’s is that they are not able to boost their sales turnover because they are not able to detect the consumer’s tastes which change from time to time hence they are not aware when to launch the right product at the right time, hence their position in the chewing gum market in India is affected despite a strong market share in the world market for chewing gums. Therefore this report focus on-

To what extent will a promotional mix based on brand positioning techniques help Wrigley’s to boost their sales in the Mumbai market for chewing gums?

Procedure/methodology:

Primary research consisted initially of an interview with Arup Banerjee who was ex-area merchandising manager. Again through e-mail communications I asked him many things in which I had doubt. Utilising a range of open questions my interview and communications focussed on aspects of Wrigley’s current market share, promotional mix stratigies used by them and other promotional mix strategies used by them and how it has helped to increase market share in Mumbai, internal and external factors forming relevant opportunities and constraints (which allowed me to prepare PEST and SWOT analysis).

I also undertook secondary research involving Wrigley’s history and how it has progressed. I also took some information about Wrigley’s from different sites. This allowed me to complete my introduction, conclusion and recommendation.

It must be noted however, that statistics and different strategies collected is based upon both ‘actuals’ and ‘estimates’. In addition, the validity of this report may be influenced by the apparent subjectivity of some marketing data given confidentally issues.

Main results and findings:

Promotional mix is defined as the set of tools that a business can use to communicate effectively the benefits of its producers or service to its customers. This is divided in two different types- above the line snd below the line. Above the line promotion refers to any form of paid-for promotional technique through independent consumer media. For e.g- television, newspaper, billboardposter etc. below the line promotion refers to all forms of non-media promotional strategies activated. For e.g-branding, slogans, logos etc.

At an initial stage of wrigley’s, television was the major promotional mix they were using because at that time television was very popular and children can easily be attracted. In the late 1990’s they had market share around 54% and wrigley’s became famous in more than 140 countries due to higher market share. Higher market share also helped them to increase sales over the world. Gum was an inexpensive treat that people could have whenever they wanted it-whether to satisfy a craving for something sweet or to get rid of bad breath due to this company made many new innovations, for e.g- Some brands, like Freedent, reached out to older consumers who were dentures. Bubble gum was geared toward children. Wrigley had been successful for so long because the company concentrated on the one product it produced well and did not try to enter another type of candy or food business. At that time of period Ninety percent of the company’s advertising budget went toward television commercials. Its commercials had a reputation for being conservative. The basic idea remained the same, but the company invented fresh approaches for each campaign. As the passage of time their brand name also increased and they have reached to great heights.

Wrigley products sell in mom & pop stores as well as the modern format stores. Prior to the electronic media becoming as robust as it is today Wrigley believed in the world of merchandising. It highlighted its brands into the stores through various innovative merchandising units which created facings for its brands. Slowly it became a regular format where Wrigley still believes in merchandising its brands at the checkouts of the stores as it is the place where the final decision is made by the consumer on buying an impulse product. So now it’s a two way approach to the consumer which Wrigley is following at the market place.

Graph showing the sales of Wrigley in mumbai from 2005-2009:

From the above graph we see that in Mumbai Wrigley’s sales have increased from 7% in 2005 to 23% in 2009. Going by this trend it is clear that Mumbai will be a major market for Wrigley’s in India and it is expected that they follow the line of market penetration where they will sell their chewing gum in an existing market like Mumbai. Wrigley’s is the first company to have seen an increase in 6% of sales in the period of 2008-2009 in Mumbai.

Analysis:

SWOT analysis of Wrigley:

Strengths:

Wrigley is the only chewing gum company which I established since having varieties of gums sold in more than 160 countries.

It has a base of more than a million retaliers trading Wrigley products in India on daily basis.

Weaknesses:

Non availabilities of varieties in SKU’s to launched in India to kill competition.

Eye catching and tricky advertisement which will retain into the minds of viewers/consumers for a longer period of time to create brand advertisement.

Opportunities:

Big players like Perfetti, Lotte, ITC, and Cadbury’s are entering the gum segment which had been a monopoly business for Wrigley’s so far. Estimated business of the industry is almost close to 200 billion.

Threats;

Expansion of confectionery business in other various segments like chocolate, chew categories. This can be explored further as the retailer base at pan india level is immense and can be immedaitely encashed.

Porter’s five force analysis:

New entrants organization -Cadbury’s, Perfetti, Lotte

Substitutes- Happydent protex

Buyers- Consumers who believe in oral hehehealth care

Competitive Rivalary

(Existing Competitors)

Suppliers – local Distributors

New Entrants: The threat of new entrants to Wrigley’s will usually intensify competition in the company. The existence of high entry barriers prevents new entrants from being attracted to the market but this is not the case in the chewing gum market a there are many competitiors existing in market. Alo kraft a very popular brnd has take over around 19% share of Cadbury, so now even they may introduce chewing gum in the market which may reduce the sales of Wrigley in the market.

Substitutes: The existence of substitutes like happydent can lower the attractiveness and profitability of Wrigley’s. The larger the degree of choice for customers, the lower the profit margins tend to be as firms will have less pricing power. The extent to which substitutes are a threat (i.e. the ability of customers to make a switch to rival products) depends on brand loyalty, relative price of substitutes and the cost of switching to substitute products).

Buyers: Buyers are the customers, both private individual and buinesses. In the case of Wrigley, they sell the gums to local distributor who then sells to the retail shops and then they sell it to customers. If local distributor have high bargaining power it means they have a large degree of influence over the decision made by business.

Suppliers: Suppliers are businesses that provide stocks (raw materials, manufactured products and finished goods). In the case of Wrigley, they import raw materials from Australia, they don’t give manufactured goods to any company instead they directly give their finished products to local distributors who then sells to other retail shops.

Today the promotional mix used by Wrigley’s is not only television but it has also started internet and radio as a new way of promoting their products. The reason they used Television media was because people spend their quality time in front of TV and the robust and entertaining programmes on TV attract their viewers and thus this becomes a very important media for Wrigley to communicate their product through this media. Now Access to internet has also become common and large number of people access internet as this is a fast media where the communication can be seen and can be clear. This penetrates into the minds of the people and thus is a very effective media of marketing. In early 1990’s they mainly focussed on television but as the time passed internet was used by people at high rate. Also today radio is very popular in Mumbai, most of the people listen to it in their free time so wrigley have even started to advertise on radio, also they offer many schemes to people, this has been very helpful to wrigley to increase the sales.

With the help of new promotional mix used by Wrigley’s, they have 360 degree of communication with the consumers which has helped them to increase sales in Mumbai in 2009 over 2008 by 15% which is the highest ever sales happened in the history of Mumbai Sales.

Conclusion:

Given management’s perception of market opportunities in Mumbai, it does appear that management should invest more in Research and Development (R & D). After analysing the problem faced by Wrigley it indicates that they should keep an eye on the ongoing fashion in the market which can attract consumers. Also they should know when to launch a new product, where to launch and where should it be introduced, foe e.g- if they introduce sugarfree chewing gums to children then there sales may be very low. The problem faced by Wrigley is that they are not able to boost their sales turnover because they are not able to detect the consumer’s tastes which change from time to time hence they are not aware when to launch the right product at the right time. After the change in promotional mix strategies used by them, i.e. when they started advertising through internet and radio, it really helped them to boot their sales in Mumbai. In the year 2009 their sales was increased by 15% which is the highest sales in the history of Mumbai.

Recommendations:

As such my recommendations would be:

Underatake further research in terms of the specifics of Mumbai market, and its demographics.

More accurately determine the precise nature of establishment and detect the consumer’s taste.

Initiate more and more promotuonal mix strategies to aware the consumer about their products.

However my analysis is limited, further researh and testing of market shouls be done so as to increase their sales in Mumbai market.

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