British American tobacco Bangladesh is planning to extend its famous brand 555 in chewing gum market. This chewing gum is very unique in terms of its ingredients and till now no other competitors have come up with such idea. We are targeting smokers as our target market since the chewing gum is specially made to remove the after taste and smell from smoking cigarettes. This 555 chewing gum is a sugar free and Aspartame (toxic sweetener) free strong mint gum with an essence of Apple that provides long lasting fresh breath.
The primary marketing objectives of this plan for the first year are to achieve 6 percent of the Bangladesh market share and unit sales of 850,000. The primary financial objectives are to achieve first year sales revenue of taka 8.5 million by selling 850,000 units which will keep first year losses around 0.5 million and then try to make profit as early as possible in the second year.
Current Market Situation:
BAT has founded that the mint flavored chewing gum market in Bangladesh is mostly served by international manufacturer like Hershey’s, Wrigley’s and Perfetti Van Melle USA Inc. But still these manufacturers have not come with such idea of not using aspartame as a sweetener in their product. But since all these products have gained some popularity, the competition is high. The estimated size of the market is tk. 2 billion with a growth rate of 25% expected within the next four years. So BAT must carefully target specific market segment.
The market of the 555 chewing gum consists of consumers who smoke and want to get rid of the bad smell that come from their mouth after smoking. Only one segment is being targeted during the first year.
The purchaser of this chewing gum will get only one flavor at the initial stage. Increased competition has resulted in lower price and lower profit margin. Lower price is helping the sales of chewing gum in the lower end of the consumer market, but at the expense of gross margin.
555 chewing gum offers the following features:
• This 555 chewing gum is a strong mint gum, which is very effective to remove the after taste from smoking cigarettes. • Apple flavor is added with this chewing gum
• This chewing gum is Aspartame free. Aspartame is a toxic ingredient, which creates negative, affect on health. • It is sugar free.
• Xylitol is used in this chewing gum as a substitute of sugar. • The package is easy to use, recyclable and unique. • There are ten gums in one packet and after breaking the seal the packet can be closed again firmly which is distinguishable from other chewing gums. • A preview of the product is given below:
First year sales revenue is projected to be tk. 8.5 million by selling 850,000 units at a wholesale price of tk. 10 per unit. During the second year we plan to increase the profit margin by selling more units.
Our major competitors in the chewing gum market are international manufacturers from other parts of the world. These manufacturers have developed different flavors to meet the need of their target customers. Key competitors include:
• Ice breakers
Despite this strong competition, 555 chewing gum can carve out a definite image and gain recognition in the targeted segment. By using a unique flavor of apple mint and rejecting Aspartame, 555 chewing gum can gain the competitive advantage.
As chewing gum is a convenience product, we will use wide spread distribution in convenient locations. But in the first year we will emphasize on trade sales promotion with our distributors who are...