Yes, We Chew


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An all-around analysis about wrigley's development strategy worldwide

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Yes, We Chew

  1. 1. CHEW!
  2. 2. Innovationin China’s Confectionery Market
  3. 3. ObjectiveExamine the reason hiding behind Wrigley’sSuccess in China via various channel, give outconstructive recommendations
  4. 4. Introduction The Chinese MarketS.W.O.T. Analysis Recommendation
  5. 5. • William Wrigley Jr. Company founded in 1891 Introduction• Originally sold and• Headquarters located in Chicago, Illinois
  6. 6. • 1892- William Wrigley Jr. began packaging the chewing gum with the cans of baking powder. Eventually the chewing gum became more popular and the company began producing chewing gum.
  7. 7. • Wrigley started his own chewing gum brands: -Lotta- targeted the general market -Vassar- targeted women -Spearmint- cool and minty flavor• That next year, Juicy Fruit, a sweet fruit- flavored gum was introduced.
  8. 8. Tell em’ quickTell em’often Yeah, I’m the one who Advertise
  9. 9. • Production facilities expanded throughout the following 100 years, eventually reaching 19 facilities in 19 countries. Wrigley currently sells its products in over 180 countries.
  10. 10. • Confectionery includes chocolate, sugar confectionery and chewing gum.• In 2007, the global confectionery market size was around $141billion expected to grow to $145billion by 2010.
  11. 11. 14% Chocolate Sugar Confectionary 55%31% Chewing Gum
  12. 12. The World’slargest Confectionary company
  13. 13. • Wrigley were relatively weak in the sugar confectionery market• whereas Mars and Wrigley were strong in the chocolate and chewing gum market, respectively.
  14. 14. Aggressive FunctionalExpansion Confectionary
  15. 15. Exploring Enhancing Developing Old Old New Product Product Product
  16. 16. • Developed markets- Wrigley focused more advanced benefits like natural and organic ingredients, sensational pleasure, convenience, more sophisticated innovations for different target customers.• Developing regions- Wrigley focused on fundamental benefits of oral health and new flavors.
  17. 17. China’slargest Confectionary company
  18. 18. Take a closer look
  19. 19. That’s right! We are allPrice Sensitive!
  20. 20. China has been growing on average at a double –digit rate—and profitableeach year– since we started manufacturing locally back in 1993. We are alsonot resting on past success, but are keenly focused on gleaning additionalmarketplace insights to drive innovation that is both relevant and motivatingto consumers across China. - William Wrigley Jr.II
  21. 21. Product Price Promotion Place new flavors for Extra, including cool mint, strawberry, melon and blueberry Extra Xylitol New convenient package Extra Xylitol and the Whitening series Traditional Chinese herbal flowers and fruit
  22. 22. Product Price Promotion Place become willing to spend more on confectionery for their children (higher pricing)
  23. 23. Product Price Promotion Place Benefits of dental care, weight control, stress relief, and increasing alertness and concentration fashionable and healthy image maintain a fresh image to consumers by introducing new variants every now and then.
  24. 24. Product Price Promotion Place wide distribution network. 2.2 million distribution points, or over 90% retail penetration covered more than 300 cities in China
  25. 25. Strengths Weaknesses Opportunities Threats Leading market position: World’s largest gum company - 63% of global market share in 2007. It was also the - Fourth largest confectionary company in the world Also in 2007, of the 7 top countries in terms of confectionery sales in retail, Wrigley was a top confectionery player in 6 and the industry leader in gum in 5. Allows Wrigley to compete aggressively in every nation and leverage its presence wherever it competes.
  26. 26. Strengths Weaknesses Opportunities Threats Strong financial performance: Robust financial performance in FY2005-07 periods: - Revenue increase from $4,159.3 (32442.54HKD) in FY2005 to $5,389.1 ($42,034.89HKD) in FY2007, a CAGR of 14%. Operating profit increased from $776.3 ($6055.14HKD) million in FY2005 to $962.8 ($ million in FY2007, CAGR growth of 11%. Net profit followed the same pattern with an increase of 11% in FY2007. Strong financial performance enhances its stakeholder’s confidence.
  27. 27. Strengths Weaknesses Opportunities Threats Research and Development capabilities: Wrigley has strong research and development (R&D) capabilities. Its R&D expenses were $60,796 ($474,208.8HKD) in FY2007. Has 80+ innovations in products or packaging thanks to R&D. - “5” Gum’s Rain and Cobalt flavors ranked first and third. Innovation in packaging is increasing consumption of other brands. - Germany’s launch of a premium bottle package - Poland’s new peg bag pouch provides added value to consumers. In FY2007, new products accounted for approximately 20% of its net sales.
  28. 28. Strengths Weaknesses Opportunities Threats Diversification of confectionary business: Wrigley acquired by Mars, Inc. in October 2008. Combined, now commands over $27 billion in sales and employs more than 64,000 associates worldwide. Strong foundation of established brands in 6 core categories: - Chocolate - Non-chocolate confectionery - Gum - Food - Drinks - Pet care
  29. 29. Strengths Weaknesses Opportunities Threats Brands include: M&Ms Snickers Mars Orbit Extra Doublemint Has strengthened, diversified, Enhanced growth potential and given us a competitive advantage.
  30. 30. Strengths Weaknesses Opportunities Threats High dependence on the US markets for revenue generation: The US accounts for approximately 90% of its North America’s net sales and assets. 29.4% of its total revenue in FY2007 was the from US. This makes Wrigley’s in the US more exposed to country specific factors such as labor strikes, changes in economic conditions and increasing competition.
  31. 31. Strengths Weaknesses Opportunities Threats High dependence on the US markets for revenue generation: The US accounts for approximately 90% of its North America’s net sales and assets. 29.4% of its total revenue in FY2007 was the from US. This makes Wrigley’s in the US more exposed to country specific factors such as labor strikes, changes in economic conditions and increasing competition.
  32. 32. Strengths Weaknesses Opportunities Threats Seal of acceptance from the American Dental Association likely to push up sales: American Dental Association’s (ADA) Seal of Approval for Extra, Eclipse and Orbit in September 2007. ADA is the nations largest non-profit dental association, representing more than 155,000 dentists The ADA Seal displays that chewing Wrigleys sugar-free gums can help maintain good oral health. The seal is also highly influential in increasing purchases among consumers. More than 92% of consumers said their purchase intent increased when they saw the ADA seal.
  33. 33. Strengths Weaknesses Opportunities Threats Emerging economies of China and Russia to boost its revenues: In China, and Russia the company is seeing double-digit category growth rates. China is the third-largest economy in the world and Wrigley is China’s largest confectionery company. Wrigley has built greater retail distribution than any other consumer product company - ACNielsen. However, it still remains toward the lower end of the global scale. Despite this, Wrigley’s full range of confectionery offerings has established a strong foundation for future business expansion.
  34. 34. Strengths Weaknesses Opportunities Threats Growing Hispanic population in US: Hispanics are the most rapidly growing ethnic group in the US. The US Census estimates that by 2020, the Hispanic population will reach 59.7 million or almost 17.8% of the total US population. Nielsen Media Research estimates that the buying power of Hispanics will exceed $1 trillion USD by 2008 (a 55% increase over 2003 levels) Wrigley has appointed the Bravo Group (Bravo) agency of record for Hispanic creative and promotional marketing efforts in the US.
  35. 35. Strengths Weaknesses Opportunities Threats Intense competition: Wrigley faces stiff competition from big multinational companies – primarily with Cadbury. Second-largest producer of chewing gum in the world Recently, Cadbury strengthened its position after acquiring Intergum, a low- cost Turkish gum producer. Cadbury was the one to launch Trident and Dentyne gum brands in the UK. This severely dented Wrigley’s near 100% market share in the UK Trident Splash brand of gums is taking over market shares. Cadbury’s sugar-free gums in the US. Wrigley also competes with Hershey in other non-chocolate categories (e.g. hard and chewy candy including mints).
  36. 36. Strengths Weaknesses Opportunities Threats Chewing gum tax: Governments, especially Ireland and England, are imposing new policies on chewing gum companies. Forces them to pay towards the cost of cleaning up their products. The Irish government persuaded Wrigley, to make a contribution of $7million towards clean-up costs after it threatened to impose a purchase tax on the manufacturer. Westminster Council is also urging ministers to follow the example of the Irish government.
  37. 37.  How do you advertise/Market to a market you dominate: The market was a large and mature industry with little competition. Mars Merged with Wrigley Making it the worlds largest confectionery company. Has roughly 14% of the global confectionery, now the 2nd largest Cadbury holds about 10% of the global market share.
  38. 38.  -----1.0,2.0,3.0 Info on  Want to Raise Market Strategy. awareness of brands and product  Advertising Innovation  Choose to integrated with outside agencies  TV , Print and Radio (Old)  Must recapture all the benefits of multi-brand and keep defining the key factors to success
  39. 39.  Technology has shifted from the mechanical world to the digital world!1.0 = Being product Centric2.0 = Consumer –centric3.0 (Today) we see marketing as transforming again in response to the new dynamic environment. (Human kind)- what moves you?-Note- The idea of mkt 3.0 started in Asia! Nov. 2005 –Consultant Group-
  40. 40.  Attention was given to a nation where human centricity and the character of spirituality overcame the challenges of diversity. 3.0 Must Make Use of Media:Expressive Social media: Blogs, Twitter, YouTube etc.Collaborative media: Wiki, Rotten Tomatoes, Craigslist. ( People can do there own homework now and Choose)
  41. 41.  PERCEPTIONS & Choice  Chinese buy Avg. 10 sticks of Gum a year g/eng/sheena_iyengar_on_t  American’s Avg. 160 he_art_of_choosing.html  Taiwan Avg. 70-808:40s to 10:15 A Manager of Wrigley-- Ideas to think about- said “ I don’t think Wrigleys started as a soap Co. – started giving out one People know how stick of gum with xyz global Wrigley’s is” In product…. Bring this back: the past they have In China: Only have sticks of gum in Dental and health always branded facilities. Locally
  42. 42.  A Blogger “all it is  repackaged Wrigley com/watch?v=RE4C spearmint” HTiHS_8 This may be true however they have found a way to recapture the attention of the there target Audience (Marketing 3.0)
  43. 43.  Growing up on Gum  TED Clip– Ref. in the West vs. it just being introduced in 1989/ Guangzhou What is Chewing Gum “fragranced breath candy”-What is Disney concept-
  44. 44.  Concept Creation-  In the coming 5 to 10 Benefits of Chewing years. It shall be Improving oral health challenging for Managing weight Wrigley to go beyond gum and compete in Relieves stress the larger Some research confectionary market suggested—Increased in order to sustain its the flow of blood to growth in China. the brain by 20-40%
  45. 45.  Make partnerships and business ventures with the local community“Get involved” Dental is a start Gum/ Fast Food Wrigley / fitness gym
  46. 46. Sourced by: