Marketing Strategy of Mars Incorporated - Research Paper Example

Full topic and Section # of The first half of this paper primarily deals with the marketing strategy of Mars Incorporated from the time when it was incorporated till the current period. The second half of the paper gives suggestions as to how the company can improve upon their marketing strategy in the face of mounting competition in order to ensure future sales and profits. Mars Incorporated is a privately owned company which started with very humble origins, much like many of the success stories of the current era. The idea was conceived in the kitchen of Frank. C Mars in the year 1911 when he first opened his Mars Candy factory which would ultimately go on to fail. However in 1923 his son invented a new product called ‘Mars Milky Way’ bar, which was very well received. Between 1911 and 1932 the company was relocated a number of times until Forrest Mars established Mars Limited in the United Kingdom. Over time the company has expanded into different avenues and it operates in six different business segments; food, chocolate, pet care, drinks, confections and symbioscience1. The marketing strategy of Mars incorporated is one that is geared towards the success of an industry built on the ambitions of a man who ran the company with a fanatic dedication. The following description by Joel Glenn Brenner (the only reporter ever to interview him) of Mr. Mars in New York Times (1999) explains to some extent the reservoirs of commitment and dedication with which the company has been run. He stated that there was an extremist who got down to his knees, in a praying manner, and he prayed for all the candy brands like Milky Way, Snickers, and so on. By doing so, he aspired respect of his employees and their loyalties for attaining quality, showing his will to pay salaries thrice better than the competition offerings. A noticeable point is that the pay-checks at Mars, are linked to the output and performance of the business. Following paragraphs describe the broad categories into which the marketing strategy of the company can be divided. Market growth Higher market penetration- Initially when the company was still starting out and had few competitors, expanding market base was also accompanied by an increase in the overall market growth which meant that the Mars market share also increased rapidly. Over the last couple of decades however, competitors such as Kraft and Hershey’s have acquired a dominant presence in the candy market. Mars and Hershey’s due to their dualistic domination of the confection industry have become known as the ‘Candy Kings’ of the chocolate world (New York Times, 1999). Having a lot in common, the two companies in the initial decades after their creation started on a very friendly footing and were allies. (The other M in M&Ms stands for R Bruce Murray, the son of the Hershey’s president). It was two decades after the death of Hershey that the relationship changed into one of morbid competition and increase in sales and revenues for one company represented a loss of profits for the other. Both Hershey and Kraft foods, which is another strong competitor are currently involved in a bid for merger with Cadbury (New York Times, 2009) which shows the extent to which competitors in the confections industry have grown and acquired a large proportion of the market share for themselves. Finding new markets- Many brands of the company that had initially been created for the British market were then later sold in US as well. From there the company went on over time to acquire branches in Ireland, France, Germany, Japan and Australia. The company’s marketing strategy therefore constantly tries to tap into previously untested profitable market segments. Other than that, the company bought Doane Petcare Company in the month of June, in 2006; this enhanced the company’s standing amongst its competition of food category of dry pets in the US. Similarly, during April 2008, in collaboration with Berkshire Hathaway Incorporation, the firm also bought the world’s largest chewing gum manufacturer, Wrigley’s, for a cash price of approximately $23 billion. This shows that at times the company has followed an aggressive market strategy to break into new financial ventures and ensure constant market growth. Developing new products for existing customers- The Company has constantly been on the run to innovate. Each individual branch of this huge company is responsible for catering to the immediate region that it is located in which is a very effective marketing policy since it allows the business immediate contact with the customers maximizes efficiency as individuals are able to exercise quick decision making in their respective region. The North American Branch of the company has, for instance been catering to its regional customer base by the recent launch of Goodness Knows luscious snack squares in Boulder, Colorado which comes in three different flavors and the 3 Musketeers Truffle Crisp bar which is available in two-piece single-serve packs at select convenience store (Business week, 2010). Although a regional approach is a good policy to follow, it has to be kept in mind that this intensive approach has been followed by the company primarily in Europe and North America and therefore there is some scope for further expansion in regions such as Middle East and Central Asia. Develop new products for new customers Market stability Mars marketing strategy shows a clear willingness to meet competition in order to maintain its market share. During 2008 February, Mars Canada commenced a new variantion of Mars bar – the "Mars Caramel" – as a competing force in the competitive arena from other products such as Cadbury Caramilk and Nestle Aero Caramel bars that were launched by the competing firms. The company has had to deal with a fair share of negative publicity regarding its products. During July 2005 there was an unidentified extortion attempted towards the Star City Casino, while the guilty extortionist involved actually mixed poison in seven Mars and Snickers bars in the NSW (New South Wales) that resulted in the company having to recall its entire stock of products from stores in that region. A total of nineteen people were affected and in August, after the threat to the public was reduced to the point of being negligible the bars returned to the shelves with an advertising campaign that went as ‘ Feels Good To be back’. Additionally in 2007 they made it known that they used rennet, a chemical substance coming from calves’ stomachs in their products therefore most of their products would no more be appropriate for the individuals who are vegetarians, particularly the Hindus. At the same instance, rabbinical authority announced these products as not being fit for Jewish consumption due to not being in keeping with the Jewish Rabbinical laws. The decision to use rennet was not welcomed at all rather suffered a huge negative response by a number of groups, while the Vegetarian Society stated that during the current stage of time when the consumers are quite concerned about the ingredients of their food and its respective origin, the decision of Mars for utilizing non-vegetarian whey is a setback. Interestingly, these plans were quickly abandoned by the firm stating that it was quick to realize in a clear manner that the firm made a mistake by taking up this step. These incidents show that the marketing strategy has been very perceptive of the majority consumer opinion and has time and again made attempts to ensure that the ingredients being used in their products were unobjectionable and that their products were withdrawn off the market in case of any threat. In order to maximize brand loyalty in its consumers Mars has also been involved in a number of charity initiatives. The company’s Canadian Branch launched a campaign called ‘Random Acts of Chocolate’ which gave out 8.5 million coupons that could be exchanged for free chocolate with the vision in mind that it takes very little to make a person happy( CNW, 2010). In addition they conducted a survey that asked the people whether or not they were on the giving or receiving end of happiness which received a very positive response by the audience. Rather than keeping a hardliner profit maximizing objective in mind, the marketing strategy of Mars takes on a more social welfare approach which distinguishes it from its competitors. Cost control The company has seen massive ups and downs in consumer consumption of chocolate which could have potentially disastrous effects on revenues and sales and borne them with resilience. For instance their sales plummeted in the sugar scare of 1970’s which was cause by widespread fear in the people that sugar kills. Mars fought to find favor with its customers by associating itself with athletics and for the Olympic Games of 1984, the business paid out a sum of USD five million for having Mars and Snickers bars proclaimed as the certified snack foods for the mega event (New York Times, 1999). Additionally effective pricing techniques have been part of the overall market strategy. A close observation leads to the conclusion that the price of bars made by Mars actually relate to the fluctuation of GBP, and this has been witnessed since the World War II; this is an efficient mechanism for ensuring consistency in profit lines, and stable prices. Mostly the company has followed a policy of isolation and over the entire century of their existence they have almost never been profiled by reporters and journalists. This means that a very limited amount of information regarding costs and revenues is available to the public. Joel Glenn Brenner, one of the few reporters to ever be allowed access into the chocolate empire said of it that: With $20 billion in annual revenue they can afford to be as eccentric as they please, and they are” (New York Times, 1999) Suggestions as to how the company could improve performance in the future In earlier decades the target market for any company had been limited to the immediate region that it operated in due to the constraints imposed on it by an underdeveloped infrastructure, limited capital investment and undeveloped base of technology. Fast moving consumer goods, particularly in the category of food products were produced in restricted amounts also due to the absence of long term storage and transportation facilities that would enable market expansion. These restrictions automatically limited the overall scope of the marketing strategy. The brand name and brand reputation had to be built only over a defined region. Lack of development in infrastructure and technology also signified limited product information in extended regions which resulted in limited demand making marketing strategy a side procedure of measured significance. However, over the past few decades, humanity has made huge leaps in transport and advertising technology so marketing in the current period has become a separate unit with clear goals that contribute significantly to the profits in an organization. Mars Inc has developed and gone from being a small little known factory to a household name but it will have to introduce a number of changes in its marketing strategy to bring it in line with that of its competitors. In keeping with its current strategy, the company would have to create miniature organizations within the larger organization that are designated the responsibility of constantly following up on the consumer wants in each country and region. Next, the company will have to put a system in place that enables fast action to be taken for the growth of newer products and the updating of current products in accordance with the requirements of each particular region. This would allow the company to accommodate the marketing strategy of each region in accordance with the consumer demand in that region. The company would be able to ensure constant gains in market share only if it manages to stay ahead of competition by acquiring rapid information regarding changes in customer preferences and bringing the modified product to his doorstep. Time is of essence here therefore it is of primary significance that the company engages in an ongoing system of market research that gives it access to important information. The purpose of every marketing strategy is to remind the consumer of the use that the product serves for them. It must be kept in mind that Mars does not serve functional requirement for the customer in the sense that its products don’t serve any primary need. Rather it is a luxury product providing the consumer pleasure and therefore satisfying an emotional need. Consequently the advertising has to aim at remind the customer of what Mars does for them in the sense that how it makes them feel. Marketing slogans and advertisements should be designed to inform and remind the customer of the pleasure that the consumption of mars bars gives them. Ideas such as the satisfaction of senses, soothing of nerves and provision of health benefits have to be incorporated in the ads and promotion strategies. It is important to make use of the most modern technology available to get to the consumer. Be it print media or internet, the company has to explore every avenue that would positively impact sales. Online marketing has become a dominant marketing strategy but Mars has, unlike its competitors, a very limited online presence. Facebook, a very useful medium of advertising in the modern period, has not been explored by Mars to its full extent. Although the company has been using television ads since a very long time, they are few and in between long gaps during which Mars has minimal television presence. Its competitors on the other hand pursue a form of advertising that assaults the consumer with continuous images and television ads of their product. The advantage of these online networks is that they provide a relatively cheap method of getting in touch with a very large number of people within a very short period of time. The company would be able to keep a track of the number of people clicking in to their advert as well as particular details of the individuals who are clicking such as age and gender which can provide important information regarding the composition and preferences of the target market. In addition, network groups and blogs are a good way of bringing mars lovers from over the world into communication with one another to obsess over their mutual liking for the product which would translate into more time spent thinking about Mars and therefore more purchases of Mars. Most of the company’s advertising has been in the English language which means that non English speaking communities are not bought into the fold of the market. The company will therefore have to advertise in the local language of each region thereby making its marketing strategy making it friendlier to indigenous cultures. Keeping in mind the ethnicity, local custom, religions, cultures and ground data provides the company with more information regarding what pleases the customer and gives it a direct chain of communication with its customer base. Advertising carried out at a very local level would bring in new customers as well as refresh the taste of mars bar in the memories of existing customers. The company is increasingly having to face more competition and is at a point where it is imperative for it to incorporate the aforementioned changes into its marketing strategy. It has ruled alomost without direct competition for half a century and then from a position of relatively hegemonic market control for another half. But the speed of growth of new businesses in the current era can bring the company to a crushing halt if it did not make the requisite changes in its marketing system. References New York Times December 12 1999 Inside the Secret World of Hershey and Mars. Joel Glenn Brenner http://www.nytimes.com/1999/12/12/books/call-willy-wonka.html?scp=1&sq=Call+Willy+Wonka+&st=nyt New York Times 2009 My Chocolate Meltdown by Arthur Lubow http://www.nytimes.com/2009/11/22/opinion/22lubow.html?_r=1 Business Week April 2 2010 http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=184468 New York Times February 21 1999 http://www.nytimes.com/1999/02/21/nyregion/a-creative-spark-on-the-island-chocolate-barons-fight-for-supremacy.html CNW April 1 2010 http://www.cnw.ca/en/releases/archive/April2010/01/c7154.html Read More