January 2008. By Ramon Diaz Bernardo, Professor of Marketing at IE Business School.Many think the success of the original lollipop company, Chupa Chups, is because they were the first to put a sweet on a stick. But the real key to this success story is good marketing.
The success of Chupa Chups is, as almost always, the consequence of various concurrent factors. Therefore, it is not easy to identify one single reason why Chupa Chups is today a large enterprise. Searching for the common denominator of these factors, I consider it reasonable to say that the key to the success of Chupa Chups lies in the fact that they have been very good at marketing.
Why does the key lie in marketing? Because, in my opinion, the companyÂ´s success can be summarised by examining how it has very efficiently managed for famous Ps of marketing: product, pricing, promotion and placement.
When we speak about product in marketing, we referred to something tangible, i.e. the product itself (in this case, a sweet on a stick) and to something intangible, i.e. the brand name. The product designed by Bernat in the 1950s was undoubtedly an innovation in the sweet world, but what I consider to be the radical innovation was the development of the brand name associated with the product. Bernat was a visionary when he realised that a somewhat undifferentiated product such as a sweet could be given a brand name and differentiated.
This brand-name and product development was joined by a price strategy that was clearly aligned with Chupa Chupsâ??s position as a sweet that was different from the rest. The Chupa Chups has been sold at a premium price from the beginning, in other words, with a price clearly above that of its competitors. This is the consequence of a brand name and differentiation strategy.
Chupa Chupsâ??s placement strategy has also been highly innovative. From the beginning, Bernat probably understood that his product was an impulse product that needed to be supported by a very attractive display next to the cash till at the point of sale. What is considered as common sense today was a revolution at the time.
Finally, the promotion strategy has successfully strengthened the productÂ´s differential elements, such as its name, logo (designed by Salvador Dali), and the publicity campaigns that have supported the companyÂ´s branding strategy.
Therefore, if we examine the four Ps, we find a clear, coherent strategy for the creation of a brand name and differentiation on a market that was, in principle, somewhat undifferentiated, which has led to it becoming one of the most successful Spanish brands on an international scale.
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