Hollywood chewing gum in Cyprus, why has its market share fallen

CTC Argosy, among others, is additionally the sole agent of Hollywood chewing gum in Cyprus.

Hollywood, which during the 1980's was the leader in sales of all the imported chewing gums in Cyprus has not accomplished to maintain this leadership and became the No 4 gum in terms of market share in Cyprus market.Our team strongly believes that marketing research is needed to find out what possibly might be the problem for this unlikable result. Company managers gave us some indications of what they believe the problem is. They consider that competitors have the advantage of producing a full line of gums and this is the major reason for their success.

However we will attempt to see the problem at a different perspective because sometimes, as the principle of iceberg is suggesting, the most dangerous part of the marketing problem is neither visible nor understood by managers (Text book p.p )We want to provide marketing managers with information that will explain the real problem and not its symptoms. This will enable them to make the correct marketing movements.MARKETING EVALUATIONThe SWOT analysis for Hollywood chewing gum, which has been the result of data analysis provided to us by the marketing managers of CTC Argosy, is the following:Strengths:* Hollywood gum has been in the market for almost half a decade and this can work favorably in convincing people about the seriousness of the company.

* The agent of Hollywood in Cyprus which is CTC Argosy is one of the biggest trading companies in Cyprus having in it's portfolio of products a variety of well known international trade marks.* The national deposit center of CTC Argosy, which is laid at a strategic place, near to the main highway, enables the company to provide immediate service to its customers nationally. It also saves time and consequently reduces the costs of distribution. Additionally the quality of service is better because the products are kept in a very healthy environment and therefore the customer receives products that are excellent in quality.Weaknesses:* Although Hollywood is participating in the four most important segments of the market (Sugar free, Sugar sweet, adult dragees and Adult sticks) it doesn't have the complete variety of gum types that Stimorol and Orbit have.

An extensive line of products should be the ultimate goal of the producer.* The limited use of promotion and distribution techniques results in a further more negative image of Hollywood Gum. For example, there is typically no print and broadcast advertising or any distributing coupons. There are no sponsoring of activities or advertising on billboards. The main objective of marketing efforts should be the cost-effectively reaching of the target market, through advertising and marketing initiatives, on a regular, consistent basis.Opportunities:* It is estimated that the total sales of gum will increase during the next year.

It is a fact that total gum sales in Cyprus during 2002 comparing to year 2001 have increased at about 13.5%. The figures speak themselves. The period is ideal and offers a lot of opportunities for market expansion and profit generation.

* Consumers these days are highly interested in getting all the benefits from the different products they consume and this includes also the consumption of gum. The new improved types of gums that are launched these days are associated with the health of teeth and mouth and therefore people perceive gum in a different and more positive way that they did few years ago.Threats:* Competition is very intense because the customer can choose among a great variety of products.* Competitors are very strong and have managed to gain a considerable market share.* Competitors offer a great variety of gums for the entire satisfaction of consumer needs.

(Sugar free, Sugar sweet, adult sticks, Adult dragees, Adult tabs, Children gum)* Competitor's products have a better position in the kiosks and supermarkets, which mean their distribution techniques, are better.* Competition is using heavy promotional techniques. Their advertising plan is designed to reinforce their marketing message in as many ways as feasible. (From the web page of CTC argosy)Definition of the problemHollywood chewing gum has lost a big portion of its Cyprus market share the last years.

It has been the No 1 imported chewing gum for a long time and over the time it became No 4. The problem seems to derive from the following two causes.* Competitors offer a larger variety of products. The solution to this problem of course depends on the production plans of the producing company and not on the agent (CTC Argosy). Of course it would be very constructive if the sole agent could influence the decisions of the producer but again this is very difficult to be achieved because Cyprus is very small market. We believe that due to this problem CTC Argosy feels that it cannot compete with the others and therefore does not make a lot of efforts with its promotional and distribution methods.

* Competition uses better promotion and distribution techniques. As we have mentioned previously, when describing the SWOT analysis of Hollywood gum, CTC Argosy is one of the biggest trading organizations in Cyprus and has the advantage of owning a very convenient national deposit center. It has access to a large number of distribution spots. This advantage should be used to promote Hollywood gum to as much as possible distributors (supermarkets, minimarkets and kiosks).Hypotheses* The above problem has been the result of not having adopted the proper promotional efforts* Advertisement is very inadequate comparing to that of competitors* Distributors are not properly approached neither encouraged to promote Hollywood gum.Research objectives* To become aware of how advertising influences the buying decisions of consumers when it comes to decide for chewing gums.

* To find out if current promotional techniques are efficient and if not what should be used to attract the attention of consumers.* To realize whether distributors are willing or not to promote Hollywood and how they would be motivated to promote Hollywood gum instead of the others.* To understand which criterion is considered by the consumer when they buy chewing gums.Research methodologyThe research will be an examination of both, consumers and distributors perception of Hollywood gum.

* It will consist two questionnaires. The one will be addressed to consumers and the other one to distributors. The reason we have divided the survey into two groups is because we need to grasp the opinion of the ultimate consumer and at the same time understand the distributor's point of view.