Chupa Chups in Mexico

After fourty years in the business, Chupa Chups is a leader specialising in the high-quality lollipop market and its sales are continually increasing. In 1996, Chupa Chups were available in 164 countries and total sales amounted to four billion lollipops a year, only 7% of which were sold on the domestic market. The company management team was thinking about investing in a new factory in Mexico. The Mexican market is the largest lollipop market in the world, and Chupa Chups is considering entering this market at a very late stage. Distribution is very fragmented and competition, both domestic and multi-national, is tremendous. This is certainly an unusual situation and Chupa Chups has no experience of penetrating a market through acquisition. This case study illustrates the difficulties of introducing a company in a highly competitive and mature market and aims to discuss the alternative channels in a very fragmented market. This case contains colour exhibits.