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Should Nike launch a Sugar-free Chewing Gum?

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Introduction

SECONDARY RESEARCH INTO THE MARKET POTENTIAL FOR A NEW PRODUCT LAUNCH Coursework Secondary Research Assignment code BUX1 Should Nike launch a Sugar-free Chewing Gum? Introduction Before any company launches a product it first carries out market research in order to find out if the new product will work, make a profit for the company and increase the companies' market share. In this coursework I intend to carry out secondary market research in order to decide how feasible it would be for Nike to launch a new range of sugar-free chewing gum. The reason for using secondary and not primary research is mainly because secondary research tends to be far cheaper to collect than primary research. It is also easier to find and can be gathered faster. By gathering relevant information from several sources I will be able to get an overall view of the chewing-gum market. I will look at market shares, market growth, market size, competitors, health issues and all other relevant issues in order to make an educated decision as to whether Nike should launch a new range of sugar-free chewing gum. Brand Image This is relevant when deciding whether to launch a new product because a company's brand image can give a new product a helping hand in its early stages as a new product on the market. If a company has a good brand image and it launches a new product under the same brand name then that new product will inevitably gain that brand image which will more or less guarantee the products success providing all other issues of the product are fairly decent. E.g. Its taste and cost. Nike is the largest manufacturer of sports and fitness footwear, apparel, equipment and accessory products in the world (Source: www.business.com). ...read more.

Middle

where as its competitors spent very little. The reason Wrigley's dominates this market is due to its brand and brand loyalty, if Nike could transfer their 'cool' brand image to its range of chewing gum then I think that it could be a success. New Competitors Information on new competitors is useful as it can show if Nike will have to compete with a lot of new competitors if it launches a new product. It can also show how companies that have launched new products have done. For example if a new competitor joined the market and gained a significant market share then it would show Nike that it is possible to break into the market. No substantial companies have entered the chewing gum market for years. I think this is because companies are scared off by the immense presence of Wrigley's as the market leaders. However in 2001 Colgate launched a chewing gum called 'Colgate Dental Gum', it has aimed to get a 7% market share in its first year. This is an interesting move by a dental care company and may signal the start of several dental care companies launching a range of chewing gum. Also in 1999 Wrigley's did launch a new chewing gum called 'Ice White' which is a sugar-free stick gum which helps to whiten teeth. This chewing gum has risen quickly in popularity and had a 3.3% market share in 1999, just one year after entering the market. If Colgate Dental Gum does well then other companies may join the market, if this did happen it would make it harder for Nike to gain a market share as there would be many new competitors. ...read more.

Conclusion

* There is only three main competitors and therefore it could be quite easy for Nike to break into the market with sufficient Advertising and promotion. * Nike's healthy sporty image could be easily transferred to a chewing gum with the increasingly important issues of chewing gum being good for your health. And the negative conclusions to be: - * With Wrigley's having such a big market share (87.9%) it will be hard to establish the new product as to get any market share our product must reduce the market share of Wrigley's which has been the market leader for years. * Although Nike has diversified into other areas such as golf it has always stayed close to its roots as a sports manufacturer. By creating a new chewing gum product it would be entering unknown territory and a lot of money would have to be spent on research as well as designing the new product and manufacturing it. Overall Conclusion Although to look at it would seem that the positive reasons for launching a new chewing gum product easily outweigh the negative you must take into account that the fact that Nike has never sold a food product. This is a very big factor and creates a huge risk. However, I think that due to the fact that Nike is such a big company and due to its brand image I do think that it would be feasible for Nike to launch a chewing gum. I think that it would probably be wise for Nike to carry out extensive market research and R&D before launching a product. I also think that it would be wise for Nike to create a range of sugar-free chewing gums as it is shown that although Wrigley's do have a large market share, their market share is built up by many different brands of chewing gum. ...read more.

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