New product development - Essay Example

Wrigley’s is a leading manufacturer of chewing gum and other confectionery products, which was originally founded in Chicago by William Wrigley Jr. in April 1989. In 2007, Wrigley was the world’s largest gum company, with a ‘63% of global market share’. (Marketline, 2009). The company has become a global leading super force with ‘operations in more than 40 countries and distributes it world-famous brands in more than 180 countries’ (Wrigley. com, 2010). Sales figures for last year in 2009 ‘totalled just under  189 million’ (Fame, 2010).

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Wrigley sells 12 different brands within the United Kingdom, all well known to the industry. Wrigley has over 100 years experience in selling chewing gum and excellent facilities for which to assist the launch of Vita-gum. Wrigley’s employs ‘548 employees in the UK’ (Fame, 2010), for whom many are employed in Wrigley’s UK factory located in Plymouth. This factory will provide a superb basis to aid the distribution of vita-gum throughout the UK market and important retail outlets. Wrigley’s major UK competitors include the confectionary giants Cadbury’s, as well as Super Mouth Limited and Peppersmith chewing gum.

Cadbury’s caused most controversy after they entered the UK chewing gum market early in 2007 by launching their liquid centred ‘Trident Gum’. As a result ‘Cadbury’s achieved a 15% share of the UK market just 10 weeks after launch’ (Times online, 2007). More worryingly for Wrigley was the fact ‘Tridents sales reached  33 million by June 2008’ (Mintel, 2009). Until the arrival of Trident, Wrigley, a family-controlled company based in Chicago, ‘had a 98 per cent of the British market’ (Times online, 2007). Despite the competition Wrigley remained upbeat with sales figures of just under  199 million during 2008′.

(Fame, 2010). This also demonstrates the extreme loyalty of customers showing they were still willing to purchase Wrigley branded products even with increased competition within the gum market. Thus, enabling the company in some degree to fend off competitor attacks. It also shows why Wrigley’s would be an excellent choice to launch Vita-gum largely because it will deposit a strong brand equity bringing value to the customer’s purchase. In 2008 Wrigley was incorporated by Mars. ‘The  11. 5 billion deal meant Wrigley has access to the extensive worldwide resources of Mars’ (Times online, 2008).

The merge was dubbed ‘the world’s leading confectionary company displacing companies Cadbury and Nestli?? ‘ (FoodProductiondaily. com, 2008). Again this shows further evidence of why this product should be launched by Wrigley. Vita-gum is a continuous innovation, which appeals both rational and emotionally. Vita gum is not your average chewing gum; it not only freshens breath, but also provides the consumer with their essential daily vitamins, as well as other benefits. Each chewing gum product contains a different vitamin and a different flavour to meet the consumer’s wants and needs making it both dynamic and versatile.

The product is also convenient for people who are on the move. For those consumer’s who don’t enjoy the laborious task of taking tablets, vitamins in the form of chewing gum is quickest and simplest way of gaining your vital vitamin needs. This type of product presents something completely different to the gum market, therefore it will minimise the damage of sales to other Wrigley’s products. Figure 1 below shows the potential for vita gum to flourish in the chewing gum market. There is considerable evidence that year on year gum sales figures in the UK have increased, therefore; this has the potential to be a successful product.

Figure 1: Column chart showing forecasted sales for UK chewing gum market from 2007-2012 with indication of chewing gum sales in previous years. For Vita gum to become a success it is important market segmentation is used. ‘Segmentation is the process of positioning markets into segments of potential customers with similar characteristics who are likely to exhibit similar purchase behaviour’ (Weinstein A, 1987 p. 4) Vita-gum is being targeted towards a mixed gender including young adults, upper working class professionals and people who seek an active and healthy lifestyle.

The typical vita-gum consumer will have a prospering lifestyle and need enough disposable income to select this type of gum, than compared to a cheaper branded gum that Wrigley’s possesses. It is thought that A, B and C1 consumer’s within the social-economic classification would be best suited to this type of product as they have the income to support the purchasing of Vita-gum. Financially strong people are more likely to take risks, and more apparent to try a new gum such as Vita-gum. Consumer’s within this social-economic class prefer to spend their income on luxury goods, which can be linked to the Self-Concept theory.

This theory defines that ‘people buy goods and services for the brand that they represent and its relation to the buyers’ perception of their own self concept or personality’ (Dubios and Duquense 1993, cited in Baines et al, 2008 p. 116). In other words, consistently purchasing luxury products such as Vita-gum, than opposed to Wrigley’s cheaper brands symbolises their own values within their personality – they want what’s best, that’s available to them. Vita-gum would provide a substitute for any consumers who take various vitamin tablets – reiterating the point that people can take this form of vitamin intake on the move.

Vita-gum has been created in such a way that it’s trying to stop people from snacking between meals. This especially applies to adults as ‘Nine in ten British adults eat snacks between meals, nearly half of them on a daily basis. There are in total an estimated 13 billion at-home snacking occasions a year, and 6. 4 billion occasions on the go’. (Mintel, 2008) Age was a key demographic component in the selection of target markets for this innovative product. Evidence of this is expressed in Figure 2 below, showing that children consuming chewing gum dropped by 7 percentage points between 2002 and 2006.

Although this data is a few years old it’s still relevant as to the present day where healthy eating is very important. Children’s decline in consumption of chewing gum has largely been put down to a “health crackdown” (Mintel, 2007). As a result, parents (especially mothers) are encouraging their children to eat more healthily, inevitably reducing the amount of purchases spent on chewing gum for their children. Furthermore, with reference to age, a child is less likely to worry about what products are good or bad for them.

They are more likely to buy chewing gum or bubble gum products which contain sugar as this would satisfy their needs better; instead of more functional and healthier types of chewing gum such as Vita-gum. Children may use selective exposure when purchasing chewing gum without even realising it. In this case, they are filtering out irrelevant information which they do not require and buying chewing gum/bubble gum which appeals to them, for example, high in sugar than opposed to sugar free. Figure 3 shows how functional the use of chewing gum actually is rather than it just being a snack alternative.

‘Sugar-free gum now dominates sector sales, and is the most widely used product’ (Mintel, 2009). This is emphasized in figure 2 below as 68% of chewers asked found that the sugar-free feature of chewing gum is the most important feature, emphasizing the interest in functional benefits of chewing gum. For young adults nowadays there is always the concern about maintaining a good figure so calorie consuming is of big importance – this is especially the case for young women. The diet factor plays an important part in this as consumer’s chew sugar-free gum as a low calorie snacking alternative to help slimming.

Moreover, this can be perceived once again as evidence of Maslow’s theory of motivation, which states ‘self actualisation is reaching the full potential of one that is capable of doing’ (Maslow 1943, citied in Baines et al, 2008 p. 14). In doing this a consumer is fulfilling their potential by having the ideal figure and feeling confident about themselves, as this product can act as an alternative to snacking in between meals. The diet factor is a huge motivation for this target market Vita-gum’s main selling point is its health benefits, and for young adults this would be a huge incentive to buy.