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Wrigley Eclipse Gum

Autor:   •  February 13, 2017  •  Case Study  •  4,030 Words (17 Pages)  •  548 Views

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Wrigley Eclipse Gum Executive Summary

Wm. Wrigley JR. Company is a gum producing company that holds majority market share in the gum industry with a 50% market share in 2000. Wrigley’s new Eclipse gum is competing against the already established Dentyne Ice gum and is falling flat. Eclipse’s first year was poor. Their unit shipments were 24% below the forecasted amount and suffered lower sales. Mr. Paul Chibe needs to figure how to bring Eclipse back on its feet and bring profits to the business. The biggest problems that Eclipse has is their low brand recognition, low sales, and high media costs.

        First, an analysis of Wrigley and the market it is in. Using a SWOT analysis, Wrigley has many strengths like having majority market share and a lower priced product compared to the competition while suffering from a weaknesses of funds stretched thin due to multiple brands and many projects. Wrigley’s opportunities are for Eclipse to release their new polar ice flavor to the market and their threats are that Adams is always on their tail and also about to release Trident for Kids to compete with Extra and their Dentyne Ice Products. The 5C’s Analysis is also a great tool. The company is very effective at selling gum and has brands selling all over the world. Their biggest competitions are Adams and Hershey with Adams being their main rival. The target customers for Eclipse were the older demographic but Wrigley has noticed that teens are attracted to new products and the aging baby boomers are a viable market. Finally, we used the Porter’s five forces model to evaluate the industry. The gum market is a fairly matured market and has a high barrier to entry. There are many players in the game so buyers are able to switch between brands as there is low switching costs. There are many substitutes in the market of getting a fresh breath like Tic Tacs or mouth strips. And finally Adams being a rival is causing plenty of problems for Eclipse.

        In Eclipse’s first year of sales, it did poorly compared to its rival. The first year had problems like low sales and brand recognition, and high costs in promotion. First, Eclipse needs to fix their marketing commercials. Wrigley is looking to market to an older target market with Eclipse. They believed no one markets to these consumers. In the one commercial, a person is seen smoking a cigar before eating Eclipse gum but only 25% of the target market even smoked. Also with the product positioning of “eliminate strong mouth odors,” some customers may be embarrassed to buy a product associated with that kind of positioning. The price of the product can be a benefit and a problem for Eclipse. Stores selling Eclipse have a lower profit margin so shelf space may be limited. Thus leading to lower brand awareness as customers will not be able to see it.

        The next issue is the high cost of promoting the Eclipse brand.  Low budgeted spending for promotion was believed to be the cause of the problem but that ended up being not true. According to Chibe, “‘Wrigley spent more money on the Eclipse launch than on any other in memory’” (pg. 11). As what was observed with the low brand recognition, even though there is high spending going on marketing to the older demographic, there is not much brand recognition in the 55+ age but a lot of recognition within the teenagers.        

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