3 4-5

6-7 8-9 10-13 14-16 17 18-20 21-22 23-24 25-27 28 29-31


EXECUTIVE SUMMARY This report analyses the company Wrigley’s limited and also considers new business opportunities which they can explore. The report states the opportunities which Wrigley’s can explore in NRT Smoking Cessation Aids, by developing a new product. The report analysis most of the elements of the Marketing plan. This report begins with the information about the core business of Wrigley’s ltd their product and sales trends in Australia. The report also considers various social, economical, technological and political factors which are important to analyse before the product launch. The report also analyses the trends, the consumers and competitors that are present in the NRT Smoking Cessation Aids and where the current market opportunities lie for Wrigley’s. The later part of the report explains the justification of the product launch and various objectives which would be helpful to achieve targets, and finally it concludes with the sales forecast and the Marketing Mix. The purpose of the report is to show that a brand like Wrigley’s with a high brand image and with success and history stretching more than a century feels the need to give something back to the community, showing their social responsibility. In Australia, the single largest reason for death is due to smoking which is a matter of concern and it is important for people to understand and quit the habit in order to have a healthy and a smoke free environment. In order to fight the cause Wrigley’s will be introducing a new product in the market ‘NICOGUM’ which is a Nicotine Replacement Theory (NRT) Smoking Cessation Aids with herbal extracts which is a natural remedy and not a drug-based one.

2 Its range of products includes a number of brands that offer consumers breathe freshening and tooth whitening. The Company’s principal business is manufacturing and marketing chewing gum and other confectionery products worldwide. Extra. For all its success worldwide. they believe in treating everyone . hard and chewy candies.(Wrigley.(Reuters. distributors. partners. (Wrigley’s Annual Report 2007) Three of these brands – ‘Wrigley's Spearmint. and the spirit of innovation that continues to this day. and respect. lollipops and chocolate. They are not only the largest gum company but also the fourth largest confectionery company in the world’.au) ‘Wrigley owes its success to a commitment to quality stretching back 110 years. everyone is familiar with sub-brands such as Juicy fruit. employees. they have strategically expanded the scope of global product portfolio and production capabilities.with trust. In Australia. The Company has global sales of $ Wrigley Jr. (Wrigley’s Annual Report 2007) 3 . mints.consumers. Wrigley's values has not changed. high-performance internal team. ‘Wrigley’s products are a part of everyday life in more than 180 countries around the world’. innovative culture and developed a talented. retailers and the community at large . and conducting their business with the highest ethical standards’. (Wrigley. (Wrigley’s Annual Report 2007) Wrigley’s has more than doubled their sales since 2000 which is one of the indications of their progress. fostered a more dynamic. dignity.4 billion and distributes its world-famous brands in more than 180 countries’.au) ‘Wrigley’s is a recognized leader in confectionery with a wide range of product offerings including Juicy Fruit and Altoids – have heritages stretching back for more than a century’. Eclipse and many more. Company is the world's largest manufacturer of chewing and bubble gum and home to some of the best-known brands in the world. ‘Over that same time period. INTRODUCTION The Wm.

(Datamonitor 2008) 4 . Wrigley's leading market position and brand name facilitate strong product recognition and customer loyalty.Wrigley’s has developed a portfolio of products which has helped them to achieve their position as the market leader.

1 Internal Analysis Core Business Wrigley’s was founded in 1891 and started its operation in USA. the headquarters is at Chicago. behind Cadbury and Hershey’.8% market share.4% in 2007(Retail World Australasian 2007) and 99% in 2006 (Retail World Australasian 2006). where their Corporate market share being 97. ‘Wrigley commands 65% of the US chewing gum market. more than twice the share of its closest competitor. which was driven by consumers upgrading to bigger pack sizes. In addition. 5 . Wrigley is the leading non-chocolate confectionary company in the US and the third globally. (Retail World Australasian 2008) Wrigley’s in Australia are the market leaders and the single dominant player in the Chewing Gum segment.5m in 2008 (Retail World Australasian 2008) but the past 1 year has seen a significant 12% growth in the industry value. the total grocery value in 2006 was $ 109. 99.2. The company has grown at a notable speed and as of today they are one of the world's largest manufacturers of chewing gum and other confectionary products.(Retail World Australasian 2008) 2. (Datamonitor 2008) In Australia Wrigley’s has a very strong hold with more than 97% share in the gum segment over the past three years and the leaders in the mint segment with 26.1 Products and Sales Trends in the Australian Market The chewing gum segments in Australia has grown over time. Illinois.1. which was brought about by Wrigley bottle and Envelope innovation.6% in 2008 (Retail World Australasian 2008).4m (Retail World Australasian 2006) $ 110m in 2007 (Retail World Australasian 2007) and $123.

7% 4.6% ----2008 67.0% A$108. 2007.0% 5.1% 2007 68.0% 4. 2008) In Australia. P.3% 5.4% 9. followed by Eclipse.4% 2008 A$123.4m 99. Compared to the previous year the mint segment has seen an impressive growth of 25% with Eclipse mint leading the way with 80% value growth and is now the largest brand in the segment after launching only two years ago.9% Source (Retail World Australasian 2006.3m 2007 A$110m 99.5% 4. Hubba Bubba which accounts for the remaining share in the market.5% 5.54m Source: (Retail World Australasian 2006.7% 1. 2008) The success factor for the company are their strong brands which are the major players in the market.3m A$120.(Retail World Australasian 2008) 6 .2% 9. Brand % Shares (GUM) Brand Name Extra ( Wrigley’s) Eclipse (Wrigley’s) PK (Wrigley’s) Hubba Bubba (Wrigley’s) Juicy Fruit (Wrigley’s) Airwaves (Wrigley’s) 2006 68.3% in 2008 (Retail World Australasian 2008).K.8% share followed by Nestle 25. Wrigley’s is not only the market leader in the Gum segment but also in the mint segment with 26. with Extra leading the way.1% 5.2% 10.8% 10. Chewing Gum Value and Market share of Wrigley’s(Australia) 2006 Grocery Value Wrigley’s Value Sales Of Wrigley’s A$109.Table 1.5m 97.7% 10.3% and Ferrero 18. Table 2.6% A$109.4% 4. 2007.

(CIA Fact book) The government of Australia is been promoting NRT products and also been campaigning strongly to reach the people and encourage them to quit smoking. Interest rates are falling to bring about stability in the market.6% through the year to September quarter 2008.(RBA) thus falling interest rate makes borrowing cheaper. The labour price index rose by 1% in the June quarter 2008 and 4. Australia has an effective political system that makes it a strong investment destination for both local and foreign investors(ABS).1% for the year. The Australian government has imposed ban on smoking in all enclosed areas which has encouraged people to cut down on smoking (Euromonitor International 2008). Economical Factors The recent global financial crisis has been a cause of concern for all major economies over the world.2. With strong regulations and promotion by the government will enhance the sale of NRT products in Australia which is an opportunity for Wrigley’s.2 Macro Environmental (PEST) analysis Political Factors Wrigley’s is a global enterprise and it is important for a multi-national company like Wrigley’s to maintain good relationship with the government.(ABS 2008) Thus rise in producer price index and labour price index makes the cost of raw material and cost of labour more expensive for Wrigley’s. In the recent crisis situation Wrigley’s could take advantage of the situation by borrowing at lower interest rate as the cost of capital will be low and will increase their profitability.(ABS 2008).3% annually. The interest rate in Australia has also fallen down from 7% to 6% in the first week of October’08. The producer price index increased by 2. 7 .0% in the September quarter 2008 and 5. The Australian GDP is growing at 4.

2. Wrigley’s Nicogum would benefit from that. The energy cost has risen by 8. Quit Australia and the tobacco control unit are continuously running programs across the country encouraging smokers to quit. with rising awareness among the people and government banning smoking at enclosed place all over the country will motivate people to quit.5% over the past kWrigley’s has been working on automated solution to keep both the issues 2007)The Australian government has been promoting social awareness about smoking and how harmful it is to the environment and the community. The rising trend in energy cost is Australia is another factor which would increase the cot of production. In response Wrigley’s has been investing heavily in new facilities and design in the plant in Sydney which serves the pacific region(ABB Australia). Tobacco smoking is the single largest cause of death in Australia. It is also important to reduce cost by using better technology and also keeping the environment issues in mind. (EuroMonitor International 2008) There are more ex smokers than present smokers.( Technological Factors Environment consciousness is one of the prime responsibilities of every organisation that operates in the business world. Almost 16000 people die every year cause of smoking related diseases. (Energy Australia) An alternative means like usage of solar energy can bring down operating cost for Wrigley’s.S.Social Micro analysis 8 . High promotion by the government has increased the demand for NRT Smoking Cessation Aids. (Health.

3.(EuroMonitor International July 2008) The Australian Government’s decision to make NRT Smoking Cessation Aids available to grocery retailers has both positive and negative impact on their use. 2.2 Market Trends 9 .1 The consumer The Australian government has been campaigning aggressively promoting and advertising the ill effects of smoking which has resulted in one third of smokers deciding to quit.It is important for Wrigley’s to analyse the trends in the NRT (Nicotine Replacement Theory) Smoking Cessation Aids before entering the segment with their new product ‘Nicogum’. New cigarette formats advertising and movies that promote smoking have a negative impact on consumer behaviour with regard to quitting smoking’. ‘The positive impact was that there is wider distribution and on the other hand experts(Euromonitor International July 2008) state that such products produce better results when used under supervision where the user receives support and counselling’. which can be attributed to lack of awareness of these products among consumers. as the government attempts to discourage the habit. (Euromonitor International July 2008) 2. and has also contributed to the good performance of NRT Smoking Cessation Aids. (EuroMonitor International July 2008) Herbal remedies to help consumers to quit smoking over the period has had an impact on sales.3. Sales figures are likely to go up in the future with the governments’ imposition of stricter controls on smoking. but are less likely to emerge as a significant threat to standard NRT Smoking Cessation Aids.(EuroMonitor International July 2008) ‘There are variety of products offered in the market. The Australian government has been promoting tobacco campaign and also stressing impact of tobacco advertising on young consumers through the use of internet.

July 2008) Table 3 Sales of Smoking Cessation Aids by Subsector: Value 10 . the rising concern of health and brand knowledge continued to drive smokers to quit. which enabled them to try NRT Smoking Cessation Aids products available to them in the market. such as supermarkets in 2006. The rising concern of people’s health and the environment. Bans on smoking were also extended to enclosed public areas in more states by the end of 2007. The government’s decision to ban smoking in bars and clubs in Victoria showed a positive result. smoking ban is becoming increasingly common worldwide.(EuroMonitor International.(Euromonitor International.Sales of NRT Aids experienced significant positive growth in 2007 but the increase was much less than the one experienced in 2006. July 2008) ‘value sales growth of smoking cessation aids is set to continue to rise and is one of the fastest growing areas in consumer healthcare’.(EuroMonitor International July 2008) In the beginning of 2007. The government also attempted to widen the availability of NRT aids to grocery retailers which increased consumer’s knowledge about the products. which can be attributed to availability of the products to grocery retailers. only GlaxoSmithKline Australia Pty ltd’s Nicabate brand is available in supermarkets. Of the brands available in the NRT Aid. smokers were either cutting back or quitting the habit. ‘Australian’s usage of NRT Smoking Cessation Aids rose strongly in 2006 due to efforts by both the government and the manufacturers to encourage smokers to quit’. The pharmaceutical association opposed strongly claiming that NRT products need to be carefully selected for different consumers and advice on their use was required. with distribution expanded to the channel in 2006. Chemists/Pharmacies value share of NRT smoking cessation aids saw a decline in 2007.

The sales of NRT patches is still higher than any other aid and that is because of consumers being more familiar with these products as they have been available in the market for longer time than NRT gum or NRT lozenges.5m 56.0m 2006 111.3.(EuroMonitor International July 2008) 2. the fastest growth was recorded by NRT lozenges with 15% value growth and has received a positive feedback from the users saying that lozenges are more convenient and that an oral format is more effective.3 Competitors ‘Nicabate owned by GlaxoSmithKline Australia Pty ltd.6m 33. from Johnson & Johnson Pacific Pty Ltd is second in line with 35% in value sales’.9m 20. Johnson & Johnson Pacific Pty Ltd and Alphapharn saw a decline in value share which was because of strong competition from GlaxoSmithKline and also from Novartis.6m 31.0m 2007 122. Table 4 Smoking Cessation Aids Company share by value 11 . (EuroMonitor International July2008).5m 60.81% over the past 3 years.A $ million NRT Smoking Cessation aids NRT gum NRT patches NRT lozenges (Source: Euromonitor International July 2008) 2005 97.4m 18. (Euromonitor International July 2008) Consumers perceive these brands to be most effective. with a rise of two percentage points.7m The sales of NRT products has seen a steady growth of 25. Heavy promotion and advertisement by the manufacturers and the government has largely contributed to their strong positions. is the leading brand in NRT Smoking Cessation Aids. (Euromonitor International July2008).8m 37. GlaxoSmithKline saw a steady rise in its value share in 2007. ‘Novartis’s reintroduction of Nicotinell has seen its value share increase from a negligible level in 2006 to 2% in 2007’. with 49% of total value sales in 2007.3m 50. Nicorette.5m 12.

8 35. on a global basis.0 1.4 2007 48.8 0.8 -----2.8 35. its worldwide consumer healthcare business.2 Australasia Pty Ltd Pfizer ESP Pty Ltd Pharmacia Australia Pty Ltd 2.1 ----15. On 25 June 2006.3 12.4 SWOT analysis 12 . develops.4 2006 46.4 2007 48.7 --------2.3 12. manufactures and markets pharmaceutical.2 Novartis Consumer Health Australasia ---39.1 ---------2. ‘Johnson &Johnson is a global manufacturer of health care products and related services for the consumer.1 ----15.8 37.0 13.8 -----2. Johnson &Johnson proposed to acquire from Pfizer.7 --------2.8 37. Pfizer discovers.(ACCC) Table 5 Smoking Cessation Aids Brand Share by Value % retail value Nicabate Nicorette Quitx Nicotinell Nicorette Nicorette Private Label (Source: Euromonitor International July 2008) Company GlaxoSmithKline Australia Pty Ltd Johnson & Johnson Pacific Pty Ltd Alphapharm Pty Ltd Novartis Consumer 2005 42.0 1.8 0.4 (Source: Euromonitor International July 2008) Under the Nicorette brand Pfizer ESP Pty Ltd manufactured and distributed various NRT products in Australia but Johnson& Johnson had proposed to acquire Pfizer Inc’s consumer health business. animal and consumer healthcare products’(ACCC). medical devices and diagnostics industries.8 Health -----39.1 ---------2. pharmaceutical.8 2006 46.0 13.% retail value rsp GlaxoSmithKline Australia Pty ltd Johnson & Johnson Pacific Pty ltd Alphaphram Pty Ltd Pty Ltd Pfizer ESP Pty Ltd Pharmacia Australia Pty Ltd Private Label 2005 42.

which is attributed to their brand name. with Extra leading the way with 67. THREATS Highly competitive market STRENGTHS Building brands for generation Wrigley’s has a history that stretches back for more than a century and today they are the 3rd largest confectioneries in the world. In the mint segment Wrigley’s have achieved the market leader position after an impressive 25% growth which was brought about by Eclipse mint which saw 13 . Wrigley’s was found in 1891 in the US and now they command 65% of the US chewing gum market. STRENGTHS Building brands for generation Market leader position Strong revenue growth OPPORTUNITIES Develop other NRT products International/Geographical expansion WEAKNESSES High cost of R&D Lack of experience in Pharmaceutical industry. (Datamonitor 2008) It is important for Wrigley’s to analyse the Strengths. strong product recognition and customer loyalty. Wrigley’s has build number of brands. Wrigley’s commands the market leader position. In 1893 their first products were Juicy Fruit and Spearmint and today they have a wide range of products. weaknesses in the internal environment and the opportunities and threats in the external environment. (DataMonitor 2008) They are also the market leaders in the chewing gum and mint segment in Australia.( Wrigley’s Annual Report 2007) Market leader Position In the gum segment in Australia Wrigley's is the single largest dominant player with more than 97% market share over the last three years.Wrigley’s is one of the world’s largest manufacturer of chewing gum and other confectionery products.2% share.

lozenges. and with NICOGUM they are entering a new segment.( Australasian Retail World 2008) WEAKNESSES High cost of research and development Wrigley’s presently are the leaders in the mint and the gum segment.7% value share. inhalators.5 million. GlaxoSmithKline is a significant contributor to total industry spent on R&D.3m to A$ 120.(EuroMonitor International July 2008) Wrigley’s after the success of NRT gum could also develop NRT patches and NRT lozenges which is highly preferred and is also growing. with investments up to A$ 35million each year in Australia. Lack of experience in Pharmaceutical industry or NRT products. (Australasian Retail World2008) Strong Revenue Growth Wrigley’s revenue has grown strongly with time but the growth from 2007 to 2008 saw a rise of 10% from A$ The NRT smoking Cessation Aids has a total value of A$122.(EuroMoitor International July 2008) 14 .au) if that would be an indication Wrigley’s will have to spent a good amount on the R&D cost. NRT patches have seen a rise of 20% in the last 3years and NRT lozenges has seen a higher growth of 70% in same time period.a staggering 80% value growth and is the largest brand in the segment with 26.(gsk. To develop the product it would require a high research and development cost.54m which was driven by consumers upgrading to bigger pack sizes brought about by Wrigley bottle and envelope innovation.8 million out of which NRT gum is valued at A$37. NRT is a very different segment all together and from confectionery industry in which Wrigley’s specialises entering in to the Pharmaceutical industry in which they have no experience would be another problem. OPPORTUNITIES Develop NRT patches.

3% share are two big competitors. Wrigley’s has an opportunity to expand their reach to other countries especially where the smoking population is very high. THREAT Highly Competitive Market For Wrigley’s competing in NRT Smoking Cessation Aids. Countries like China 42% smokers. India 37% (Euromonitor International 2005) to name a few.(Euromonitor International July 2008) Both GlaxoSmithKline and Johnson & Johnson have a strong history and are one of the most successful companies all over the world. Russia 41%. Therefore. have a big task ahead of them with GlaxoSmithKline with their sub-brand Nicabate which has almost 49% share and Johnson & Johnson with their brand Nicorette with 35.International/Geographic Expansion. After the success of Nicogum in Australia. A study by WHO shows that at present more than 5 million people around the world die prematurely from tobacco related diseases and the figures are likely to go up to almost 10 million by 2020 which is a rising concern. 15 . Wrigley’s has an opportunity for geographical expansion.

To conduct a customer satisfaction programme by the end of first year of operation and to score 4. (Kotler. To challenge competitors Nicabate (GlaxoSmithKline) and Nicorette (Johnson&Johnson) and obtain substantial market share within the first two years of operation. 3. Promoting and advertising the benefits about the product through supermarket sampling before the launch or by running a road show in major cities. Financial Objectives 1. 2. Business objectives 1. Geographical expansion to developing countries like India. Achieve sales of A$ 10 million by the end of second year of operation and A$ 15 million by the end of 2011.5 on the scale from 1 to5. 15% market share in the first year of operation and 30% by end of 2011. OBJECTIVES Marketing objectives 1. 2. 3. Expanding reach to the target market by regular advertising and promotion. 4. China where percentage of smokers are very high. Keller KL 2007) 16 . 2. Reduce cost of production and increase profitability before reaching the maturity stage in the product life cycle. To change marketing strategies to meet targets by identifying consumer preferences through feedback. Increase portfolio in NRT Smoking Cessation Aids by introducing NRT patches and NRT lozenges in the second year of business.3.P.

voice (DoHA 2006) • • • 62% of deaths within the Indigenous population before the age of 65 years can be attributed to stroke.9 21.4.4 21. 2007) approximately 310 smokers every week. and bone marrow). mouth. heart and vascular diseases. compared to 10% of deaths within the non Indigenous population.000 people die every year from tobacco smoking (Beg S. kidney. cervix. presenting 9.0 1622. Smoking causes a higher burden of disease than any other behavioural risk factor.3 1801. nasal sinus.3% 2006 3417. oesophagus. tongue. bladder.5 21.5% of burden on men and 6% in women. Smoking also has an adverse effect on pregnant women and also the developing foetus. urethra.2 1635. heart disease. • Over 16.3% 2007 3490. nose.(OxyGen) Table 6 Number of Smokers by Gender 2005 Total smokers (000) Male Smokers (000) Female smokers (000) Total smokers (%total Population aged 15+ yr) (Source.(ABS) The rising concern of the people’s health and also the environment has encouraged Wrigley’s to launch ‘Nicogum’ to help people to quit smoking and have a pollution free world. AACR) Smoking is a known reason of many severe diseases including cancer (in the lung.( AIHW.5 1782. emphysema. Justification of product launch The rate of smoking in Australia has declined over the past decade but it still remains the highest single factor for death and diseases.9 1762. stomach. stroke. asthma and blindness. lip.5% 17 . Smoking is the largest single cause of death and disease in Australia. throat. Euromonitor international July 2008) 3384.8 1688.

watery eyes and respiratory problems such as pneumonia and bronchitis. (OxyGen) ‘More than a third (37%) of children aged 0-14 years live in household’s with one or more regular smokers and 10% of children 0-14 years live in households where there is at least one regular smoker who smokes indoor’. Every year.There are more ex-smokers (4. Pollution is not the only the way cigarettes damage the environment.(ABS) Herbal Remedy Herbal remedies to help consumer to quit smoking has no influence and that is due to lack of awareness of these products among consumers.(OxyGen) Passive Smoking Passive smoking is also very harmful. Every time a cigarette is smoked harmful chemicals are released into the atmosphere. Wrigley’s Nicogum contains herbal extracts. the same size of 3. smoke escapes from the burning end of the cigarette and also from the smokers mouth and when people inhale that smoke it is known as passive smoking. Tobacco and the Environment Smoking not only damages health of the people who smoke but the environment as well.1million) than smokers (around 3. are cut down to make tobacco for cigarettes’. ‘approximately 600 million trees. but they act as a powerful nutritional supplement. Lobelia.5 million) (OxyGen)which shows that NRT smoking cessation aids over the period of time has helped people to quit smoking and the market for NRT aids has improved. Herbal remedies are often preferred because they are natural and not drug-based. Herbs are provided in their natural forms while drugs are extracts of the derivative herb. ‘Herbs promote physical and mental well-being and are known to possess tremendous healing properties.6 million Australian Rules Football fields. Herbs are preferred over drugs because herbs are not addictive. Herbs today are the preferred source of health care for 18 . polluting and damaging the air. but by educating the consumer about the benefits that herbal remedies have over other drug-based products would help the consumer understand and also use the product. Passive smoking can cause sore.

Lobelia reduces craving for nicotine because it binds to the nicotine receptor in the body (Quit Smoking Hub). Lobelia herb is more or less the same to nicotine which actually fools the consumer making them feel that they are still smoking so there is no craving for a cigarette. By creating awareness among consumers and educating the advantages of the product would bring about a change in NRT smoking cessation aids.80% of the world’(Quit Smoking Hub). The NRT gum over the past 5 years has grown by more than 50% (Euromonitor International July 2008) which shows that entering these segments will be profitable for the company and will also create an emotional binding with the people as they would see the brand as the one working towards the benefit of the people and the environment. 19 . Threat ‘Tobacco smoking is a worldwide threat to human health. The World Health Organisation estimates that around 5 million people die prematurely from tobacco related diseases each year and the number is expected to reach 10 million by 2020. (WHO) Other than the social cause of the product the segment is large enough to generate profits. 70% of these deaths will occur among people in the developing nations’.

(Kotler.5% of total smokers aged15+ years.490 million smokers (Euromonitor International July 2008). The benefits of using herbal cure over drug-based cure. Behavioural Segmentation Benefits: It is important for Wrigley’s to communicate the product benefits in the market place.5million (ABS Oct 08) and 21. 20 . For each target market. P. Market segment targeted and Positioning It is difficult for any company to satisfy everyone in the market place with their product.5.3% of the total population of 21. The highest rates of smokers are in 20-29 years of age group about 23. Therefore it is important for Wrigley’s to identify and profile distinct group of buyers who would prefer the product by examining demographic and behavioural differences.5%. After examining the segments it is important to analyse which segment would present the greatest opportunity i.3% in the 1419 age groups. the company has to develop an offering that is positioned in the minds of the target buyers as delivering some central benefits.e. their target market. which is 16.5% and 7. (Australian Institute of Health and Welfare)Wrigley’s Nicogum would be targeting 14-19years of age group with a 2mg and 20-45 years of age group with 2mg and 4mg for heavy smokers. and with all the NRT products available in the market none of the products are herbal products so for Wrigley’s to convey their advantages would help them to reach the target market effectively. According to the statistics in 2007 there are 3. Keller. Consumers buy products when they see some central benefits. The lowest proportions of smokers are in 60+ age group around 9. (Euromonitor International July 2008). KL 2007) To reach the target market it is important for the company to first analyse the demographic variables: Age and Life-cycle Stage: In Australia there are high numbers of smokers aging from 15years and onwards. not every customer likes the same offerings.

Herbs are preferred source of health care for 80% of the world.User status: When the product is launched in the market the users are going to be first time users. Herbs are provided in natural forms and are not addictive but acts as a powerful nutritional supplement.(Quit smoking hub) 21 . There are many NRT Smoking Cessation Aids available in the market and is rising but on the other hand the grocery value of cigarettes is also increasing which shows the lack of knowledge about NRT products. The benefits are. Positioning Strategy Wrigley’s Nicogum would be positioned as Herbal cure and not a drug-based one. To create a distinct image in the mind of the target market Wrigley’s will have to educate consumers about the advantages of herbal treatment over a drug-based one. In order to target first time users it is important for Wrigley’s to educate the users and increase their knowledge about herbal remedies. Herbs provide physical and mental well-being and are known to possess tremendous healing properties.

(Euromonitor International July 2008) With such strong products already existing in the market it would be very difficult for Wrigley’s to initially obtain higher demand for Nicogum. advertising. but with a high brand image that they possess and the trust that people have in the brand (which can be reflected in the Gum category where they have a 97%market share over the last 3 years) heavy promotions. sampling and educating the consumers the benefits of the product might result in higher demand for Nicogum in the future.69m 45.4m 42. major competitors being Nicabate with 48.5million in 2007.8% 72.8% 19.8% share and Nicorette with 35. Table7 Sales of Smoking cessation Aid by Subsector:% Value Growth 2005-2007 % growth for 3 years NRT Smoking cessation aids NRT gum NRT patches NRT lozenges (Source: Euromonitor International July 2008) The NRT gum was valued at 37.5% Table 8 Forecast Sales of Smoking cessation aids (NRT Gum) Overall A $ Million Growth in NRT Gum(average 6.01m 2009 2010 2011 48. 2005/2007 TOTAL 25.9% 20.6.5m 22 .7% per year) 2008 40. The rise was mainly due to intense promotions by the government that educated the customers which helped them to give up on smoking.3% share. Demand Estimate NRT smoking cessation aids has seen a substantial growth by almost 26% from 20052007 which shows that there has been a steady rise in the industry.

Through high promotion and advertising and with a strong brand image which stretches across an entire century Wrigley’s Nicogum can expect a substantial return at the initial stage. Table 9 Demand Forecast for Wrigley’s Nicogum 2008 Market Share(year by year) Growth from previous year Sales growth (A $ Million) 15% 15% 6. and with rising demand of NRT Smoking Cessation Aids and with consumers understanding the benefits of Nicogum and remaining brand loyal would increase their sales to 14. 23 .54m 2010 25% 25% 11.0m 2009 20% 33% 8.52m Therefore.52 million achieving a growth of more than 140% over the 4 year period and capturing 30% of the market. if Wrigley’s Nicogum in the first year of operation achieves a 15% market share the sales revenue would rise to 6 million.38m 2011 30% 20% 14.

leaflets\ Flyers. sponsoring 2-3 games would help to promote the product.(Vrontis D.7. Wrigley’s must concentrate on the following areas: Advertising – Through television commercials. 24 . also in teenager and adult magazines. bill boards. It is important for Wrigley’s to communicate and educate consumers about the benefits of using herbal remedy and the health advantage of herbs over drug-based. banners at cinema spots. banners in supermarkets. For desire and action. articles and advertising in newspapers and health guides. interest. Public relations will also play an important role – Wrigley’s could sponsor 2-3 local sports events. staff could receive samples and promotion cards to be handed out to relatives and friends.g. To be successful in reaching the consumers Wrigley’s will have to consider all the elements of the communication mix and will need to focus on pushing buyers through the following AIDA stages: awareness. through key supermarket sampling. Sales promotion. Wrigley’s will need to part with broad advertising/promotion campaigns and undertake to communicate the need and benefits of the product. Marketing Mix Strategy Promotion To develop a sub-brand Wrigley’s will require individual promotion to position and strengthen the brand. Footy is considered to be one of the favourite game for the people of Australia. To achieve 2006) In order to achieve this. Within the company.

Nicogum will be offered in two flavours of mint and fresh fruit and will be available in different packets of 15 pieces. Convenience stores all over Australia like Seven Eleven.(Wrigley’s Annual Report 2007) Nicogum could be placed at bill counters and front desks which could increase their sales. 60pieces and 90 pieces. All Pharmaceutical/chemist shops. The highest percentages of smokers are in the age group 19-29 years so to target them Nicogum should be offered at University shops. It is also important to offer the products at all stores located at petrol stations. The packet would state the terms of use and quantity to be used at every dosage which would help consumers use the product without any consultation and would also help them to consume it without any advice. 30 pieces. ‘Wrigley’s has significant expertise in shopper behaviour at the front end of the store at the checkout’. Nicabate brand is available in supermarkets. The packets would be convenient to carry and easy to consume. Product Nicogum is not like an ordinary gum so it must not be chewed constantly. Aldi. City convenience stores. Coles. 25 . Most of the small/medium supermarkets. Of the brands in NRT Smoking Cessation Aids.Place To reach its target market group Wrigley’s will need to offer their product in all the major supermarkets like Woolsworth. To get the most out of Nicogum special chewing techniques should be used which should be mentioned on the packet. 2 mg(regular strength) for normal smokers and 4mg(extra strength) version for more dependent smokers. only GlaxoSmithKline Australia Pty Ltd. With internet users increasing day by day the product should be made available on the website too.

et. Product Gum 2mg 12 pieces Gum 4mg 12 pieces Gum 2mg 24pieces Nicabate(GSK) A $ 5.99 Product Gum 2mg 30 pieces Nicorette(J&J) A$ 10.Price With a strong brand name Wrigley’s pricing strategy will need to be consistent with its product profile and value proposition.(Vrontis.75 Gum 4mg 105 pieces A$ 34. A 15 piece packet of 2mg(regular strength) will be offered at a price of A$ 5.59.75 Gum 4mg 30 pieces A$ 11. The 4mg(extra strength) version would be priced at similar lines with the 2mg version.75 Gum 2mg 105 pieces A$ 34. The 60 piece packet of 2mg at a price of A$ 18.Pulse Pharmacy) Gum 4mg 24 pieces A$ 8.99 Gum 2mg 96 pieces A $ 26.95 Gum 4mg 96 pieces A $ 26.D. 30 piece packet of 2mg would be priced at A$ 10.Wollongong) Conclusion 26 .75 (Source. Woolsworth.99.99 and 90 piece packet of 2mg at a price of A$ 2006)Wrigley’s should price their product in similar lines to that of Nicorette and Nicabate because pricing the product higher than its competitors might result in lower sales and if the product is priced lower consumers might perceive the product to be of lower quality.95 (Source.99 A $ 5.99 A $ 8. Competitors Pricing.99.

Corporate Social Responsibility is one of the major factors towards achieving sustainability in business. Wrigley’s growth can be attributed to their product innovation and quality. and also create an opening for new business opportunities. Wrigley’s with their product Nicogum has taken a step forward to fight for a cause which would benefit the community in years to come. 27 . Millions of people all around the world are addictive to smoking and that the figures are expected to grown with time. Wrigley’s has shown to be more proactive towards the community by new product development which would benefit the society. Tobacco Smoking is one of the leading causes of health related problems that we face in today’s world and it also damages the environment. Consumer’s expectation rises every time their needs are satisfied and Wrigley’s has achieved this success with dedication and commitment.

Sign up to vote on this title
UsefulNot useful