Mars, Inc Confectionery - Target Market and Customer Value Prepositions - Case Study Example

MARS, INC. CONFECTIONERY ANALYSIS Name Code & Course Professor’s name University City Date Executive Summary This retrospect paper analyzed the Mars Inc. performance in Confectionery industry across China and for further development across varied continents. A SWOT analysis was conducted to identify the business environment that Mars is engaging in and how to fully achieving its strengths, improving on its opportunities by reducing the weaknesses while tackling threats that the company is encountering. Additionally, the paper identified new product for Mars company and issued a recommendation on how the product can easily satisfy the current target market of Mars company. Justification on the strategy analysis of the new product is also conducted through SWOT analysis process for competitive strategy of Mars Incorporation Company both in China and globally. Introduction Mars Inc company, it’s headquarter in Virginia in United States of America, is well known as a confectionery company among five different food segments. The company operates in almost 74 countries across the globe. Under its establishment in 1922 by Frank Mars, the company has been privately owned up to date (Mars 2016) As such, little information is available about the company revenue data based on its business The current market positions the country among global competitors in confectionery industry. The outcome is attributed due to globalization that has enabled the company to sell its products outside Europe and Asian countries by targeting the developing nations especially in Africa. Mars company became much more famous in 2013 after being awarded AOAC International Multi-Laboratory global award for being transparent in providing detailed information about the composition of the cocoa flavour (Martindale 2013) Market Description Market Size in China Research conducted in 2013 indicates that China confectionery market size was at USD 4.4 billion with an expected growth of CAGR 7-8 percent for the next 3 years (Australian Food and Grocery Council 2015, p. 18). Due to the growth of urbanisation and improvement of China economic growth, 2015 findings indicate that China has recorded a robust growth in confectionary market up to 12% (Euromonitor International 2015). As such, China Confectionery market has more than USD 4bn (Naprata 2015). Market Leaders and Concentration United States of America is the leading confectionery market worthy USD 20.08 bn (Mintel 2015). The market is concentrated due to stiff competition having countries such as Russia at USD 9.98 bn, Germany and United Kingdom at USD 6-7bn and China having over USD 4bn (Naparata 2015). Additionally, the globalization contributes towards intense market concentration whereby new entrants such as Hershey company has the capacity to learn about processing confectionary products among others by employing R & D, hence easier for new entrants thus high market concentration Distribution and Industry Growth Supermarkets and hypermarkets are the main distribution channel for confectionery across the globe because such entities offer a wider selection of confectionery brands at different prices. Confectionery products is also distributed through convenience stores, grocery stores, vending, internet retail, discounters and specialist confectionery. The distribution channels are attributed due to the capacity to organize frequent ads for confectionery products to attract more customers. Additionally, the stores position the ease of accessibility and customer’s wider choice of selection option. Good positioned infrastructure in China is an addend advantage for confectionery industry growth. As such, China Mars Inc posted a 84.2% in market distribution and 35.2% in the industry growth (National Bureau of Statistics of China 2013) Confectionery industry is positioned for growth. Based on 2015 analysis, confectionery industry indicated a 3.2 in growth (National Confectioners Association 2015). Further research showcases that the industry will grow at a CAGR of 3.80 in the forecasted period within 2016-2020(Business Wire 2016). SWOT ANALYSIS FOR MARS IN CHINA Strengths 1. World Wide recognized brand image and strong product portfolio. 2. Strong company supply chain system. 3. Unique subsidiary products. 4. Powerful financial position. 5. Company popular brands. 6. An estimated 70, 000 employees. Weaknesses 1. Critique from vegetarian clients on the use of animal products. 2. Limited market growth from stiff competition. Opportunities 1. Ability to increase the company market share. 2. Investing in R&D. 3. Increasing presence in new developing countries. 4. Investing in Technology through increasing presence of new healthier products Threats 1.Global competition 2. Different Quality Standards 3. Health consciousness amongst people Strengths Mars Inc. Products in China are vastly recognized internationally through outsourcing and manufactured in different states. The eye-catching wrapping and the taste of its confectionery it’s a significant factor that increases the company sales to customer. Additionally, the company has a working distribution system, current labour management techniques through supply chain network. Mars Inc in China has a functioning human capital by having skilful of managers and higher number of stuff members. Weaknesses Currently, health trending issues are lowering the confectionery sales hence a weakness to Mars Inc in China market. Additionally, the price inflation of Mars Inc confectionery products and other products from similar companies contributes towards limited market growth of the company while still facing stiff competitions from companies such as Hershey in Europe. Opportunities Sourcing and manufacturing global process spearheads the capacity of Mars company to expand globally. Through technological development, Mars Inc. In China can invest in research and development in low fat confectionery and healthier products so as to meet the consumers demand. Additionally, Mars inc. joint venture with sectors such as coffee industries can easily increase the company presence in global expansion. Threats Stiff completion from confectionery companies poses threats to Mars Inc. The differences in global quality standards across countries and ingredients used pose threat to the company due to cultural differences within cross-cultural consumers based on the ingredients. The health consciousness whereby, confectionaries are critiqued to be the influence of diabetic and blood sugar problem, Mars inc. customer loyalty is likely to be adversely affected. Recommendations Target Market Mars inc. target market focuses on the adults. The company believes the segment group based on age have the ability to understand the persuasive intent of the advertised confectionery product. Additionally, adults have the ability to take decisions on what is right for the children’s diet consumption. As such, the company uses the demographic segmentation based on the age of the targeted customers. The company advocates that adults have varied income groups; hence the confectionaries are produced on varied sizes and costs to suit different social class based on the product size. The geographical segmentation tends to target adults across the globe based on the country cultural belief hence suiting the personality of the individuals purchasing the confectionery products at Mars company. Mars inc. targets the adults by product high confectionaries based on behavioural segmentation that generally occurs in the daily life activities of consumers. The approach is attained by observing festive seasons and affectionate months such as valentines day whereby confectionary products are greatly purchased like candies and chocolates. New product Description Product Labelling Mars new product tends to add genetically modified organisms to its products so as to Comply with the preferences of the consumers as per the Vermont law. Additionally, the new products are expected to come into the market without food artificial colouring that has been under critique for healthy purposes for healthy purposes. As such, the company will targets its market, the adults, to have an easier understanding the GMO used in mars confectionaries and the kind of agricultural system that Mars inc. is supporting. Through transparency and voluntarily labelling the product, the company will improve consumers purchase power. Place Mars products that have been in the industry for more than a decade were highly distributed in urban and metropolitan cities. As such, the new product tends to target both the urban cities and rural areas so that Mars inc. can improve on its supply chain distribution efficiently. As such, customers in rural areas will have the ability to access Mars inc. confectionaries. Additionally, the new products need to be available within the small retail shops, not only in Bazaars and Hyper supermarkets. Promotion Promotion in the market mix entails the integrated marketing communication based on segmentation targeting and the positioning of the Mars company new product. Additionally, the promotion strategy impacts the variables such as product, price and place of companies. Previous findings showcase that Mars inc. promotion brands are not effective hence consumers have challenges to understand which confectionery in the market from Mars. Inc is authentic. As such, the product entering the market needs a communicating advertisement with the consumers based on the brand and its quality. Additionally, the promotion needs to focus much more on the emotional satisfaction related to the consumer’s beliefs on how the Mars products makes its clients feel good about life. Price Pricing of the new product from Mars company depends on the different variables hence the need to constantly having an updated pricing. The pricing of the new product should depend on the product distribution costs, fluctuations of the economy in the operating countries, marketing and advertising expenses used in the new product. Mars has been on the record for selling confectionaries at an expensive price. As such, the new product in the market will be at a fair price that suits all social classes for competitive advantage. Customer Value Prepositions In the current corporate world, different consumers buy different values. Mars company new products customer value prepositions should be based on the company best mode of operation. As such, the company is expected to select its targeted customers for the value positioning. The new product from the Mars company should reflect the current global taste of the product towards the consumers. The new product cost-effective will tap consumers value based on the convenient and packaging of the product and, the high quality services from the company. As such the company will be attaining an operational excellence value towards customer’s satisfaction. Mars Company needs to equip consumers with the personality that consumers can easily get what they need in Mars retail stores. Justification of the New Product Mars company has a wider scope of inherent strengths in string brand portfolio can be used to promoted the new manufacture confectionery product through Strength and Opportunity (SO) strategy. The strong supply chain system will enable Mars new product to easily penetrate into the newly targeted market hence an indication of the company growths in the targeted market. Additionally, the strong financial position of Mars can easily be used in research and development (R&D) of the newly product in marketing process for ease penetration into a diversified market industry. Mars Opportunities Weaknesses (OW) strategy enables the company to develop the new product that come of different ruminates of both vegetables and animal ruminates which can easily be attained from research and development. In the process, the consumers have variety options on which confectionery product to purchase. Additionally, the newly entrant product into newer market positions the countries to increase its competitive advantages over its competitors. The Opportunity Threat (OT) strategy tends to reduce the company possibility of being under the threat with the manufactured product. The ease accessibility of the new product improves the competition advantage of the company. This is because Mars Company will be leading in the confectionary industry in having new product in the market. Consumers are best known for purchasing new products in the market that meets the requirements and their needs. Consequently, embracing the technological development and R&D the company will have the ability to meet different countries quality standards as per the requirement so as to sell the newly development product into the market across countries. Basically, the new product into the market will improve the strength and the opportunities of the Mars company while eradicating the threats that has been facing the company in China. By tackling such challenges in China, the company will easily be positioned to compete in global market while strengthen its ties with newly partnered companies such as coffee industry. References List Australian Food and Grocery Council 2013, ‘Market Insight: China,’ Expand to Asia, p. 18. Business Wire 2016, ‘Global Confectionery Market 2016-2020,’ Euromonitor International 2015, ‘Confectionery in China,’ p. 1. Mars 2016, ‘Our History, Mars History,’ Retrieved from http://www.mars.com/global/about-us/history. Viewed on 5th, September, 2016. Martindale, W 2013, ‘Mars and Nestle company urged to be More Transparent about Supply Chain,’ The Guardian. Retrieved from https://www.theguardian.com/sustainable-business/investors-mars-nestle-transparency-supply-chain. Viewed on 5th, September, 2016. Mintel 2015, ‘US Chocolate Market on Track to Hit $ 25 Billion in 2019; Lags behind Europe in Product Innovation,’ Retrieved from ww.mintel.com/press-centre/food-and-drink/us-chocolate-market-on-track-to-hit-25-billion-in-2019-lags-behind-europe-in-product-innovation. Viewed on 5th, September, 2016. Naprata, M 2015, ‘Discussing Chocolate Market Trend,’ Agro FOOD Industry Hi Tech, vol. 26, no. 1, p. 26. National Bureau of Statistics of China 2013,’Distribution in China,’ Retrieved from http://www.funggroup.com/eng/knowledge/research/china_dis_issue112.pdf. Viewed on 5th, September, 2016. National Confectioners Association 2014, ‘Confectionery Trends that Shaped 2015,’ Read More