Founded in the USA in 1881, Wrigley’s has prospered in the gum business for more than a century.
Although Wrigley’s has been manufacturing gum in the UK since 1927, the chewing of gum, originally an American habit, was made really fashionable in Europe by the American military during the Second World War. Children in the UK were commonly heard calling ‘Got any gum, chum?’ to American soldiers, who would respond by distributing a share of their rations. Today, gum chewing is one of the world’s most common habits.
Manufacturers have long since made claims relating to the oral care and dental hygiene (breath freshening) properties of gum. Gum can remove plaque acids from the mouth and, therefore, it slows the process of tooth decay. A Wrigley’s product, Orbit sugar-free gum, was the first gum product to be accredited by the British Dental Association, as a result of its benefits in terms of oral health. In the USA, the Wrigley Science Institute has been conducting extensive research in the search to identify new health benefits of chewing gum, in addition to dental claims. Its claims include that gum chewing helps weight control, reduces stress, and improves memory (although there is no hard evidence for the latter as yet). Some also argue that chewing gum is a useful displacement activity when trying to give up smoking.
Indeed, the introduction of a ban on smoking in public places in Ireland and then in the UK led to increases in gum sales in both countries.
It is argued, however, that gum is an environmentally unfriendly product, and it has been claimed that 80 per cent of all gum ends up somewhere that it shouldn’t! Westminster Council estimates that there are 300,000 pieces of gum on the pavement of London’s Oxford Street alone. Deposits of gum on the streets represent an ugly, messy and expensive problem for local authorities to deal with and, indeed, it is one of the UK’s biggest public cleansing problems.
Gum removal is extremely labour intensive and involves the use of costly machinery – a hot-jet pavement blaster costs in the region of £100,000. Some local councils have argued for some time that manufacturers should be responsible for clearing up the mess. The UK government’s Department for Environment, Food and Rural Affairs (DEFRA), which is responsible for litter on our streets, commented that it does not wish to penalise a legal product, but it has stated that it wants to see a change in public behaviour regarding the disposal of gum. In recent years the UK litter law has changed to include discarded gum in the official definition of litter. Today, if you drop gum you can be fined up to £80 – theoretically, at least. However, as one of Solihull Council’s litter wardens commented, no one has yet been fined for dropping gum because it’s so difficult to catch them in the act!

Questions 

1 Summarise the ways in which STEEPLE factors affected the UK gum market in 2007.
2 Thinking about the microeconomic environment in particular (p. 58 et seq.), how would you describe the market structure

(a) before Trident’s entry, and

(b) in 2010? Why do you think the market structure has evolved in that way?
3 Why do you think that Cadbury was initially so successful in competing against the market leader, Wrigley’s, with the Trident launch?
4 Which factors should manufacturers pay particular attention to today, in order to achieve a strong and sustainable position in this market?
Why?