SPAIN: Chupa Chups, imaginative marketing on a stick (COMMENT) - MEMBERS
Chupa Chups has announced its intention to become the "Coca-Cola of lollipops". The statement follows ten years of vertiginous growth caused by imaginative marketing, merchandising deals and a wide distribution network. Despite a fall in sales last year, the company should still be able to achieve its goals.
Chupa Chups, makers of the best selling lollipops in the world, wants to become the "Coca-cola of lollipops. The company has always shown a certain flair for innovative and often seemingly preposterous marketing. Recent examples of this have been packaging lollipops in plastic "cranky crocodiles and zany sharks", sticks of dynamite and hand grenades.
The company has also secured several high-profile merchandising deals, notably with Pokemon, the Simpsons and the Spice Girls. In 1995, it was also behind the first launch of a lollipop into space with Russian Cosmonauts.
Chupa Chups' expansion strategy worked for the best part of a decade and the brand is now present in over 170 countries. Its strategy of building its distribution network and over-the-top marketing paid off: its sales enjoyed a compound annual growth rate of 27% during the 1990s, which was a lot faster than the sugar confectionery sector as a whole.
Sales reached €424m (US$427.27m) in 2000. In 2001, they fell for the first time in ten years to €414m. This has been attributed to the waning popularity of Pokemon, when the hype around it crashed Chupa Chups was left with vast amounts of unsold lollipops.
Although Chupa Chups primarily targets children, teenagers now account for half of its sales. This has been helped by more cunning marketing ploys, such as supplying celebrities such as David Beckham or Johan Cruyff, ex-coach of the Barcelona football team, with the lollipops.
The recent drop in sales is probably only a temporary setback, and even then only a minor one. Chupa Chups has shown consistent flair in staying relevant to its fickle teenage customers, and as such there is no reason to suppose that it will not achieve 'Coca-Cola status'.
Related research: Datamonitor, "Europe Confectionery 2002 (IMCM0049)"
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