Advertising on Mars Bar Marketing

Advertising on Mars Bar

Marketing Proposal for the "Mars Bar Unlimited": "Energy of Life!"

Briefing.

In a suburb of Washington, D.C., there sits a modest, red-brick office building on a street with a number of similar buildings such as real estate agents, banks, doctors, law offices, construction companies, and other businesses typical of a residential community. The red-brick building in question, though, is a business owned and managed by two brothers now more than 70 years old, who are also assisted by their sister is this family-owned, privately held business. The nondescript building also holds some of the richest people in the United States and they got there largely by selling chocolate. According to Anderson (2004), the Mars family inherited the business from their father and grandfather. "The two brothers are sometimes seen walking up the street to a snack bar for lunch and then returning to work. They live not far from their business. The odd thing about this building is that there is no sign or other indication of the name or type of business located inside" (p. 37).

The ubiquitous quality of the company's product lines might suggest that the company's headquarters would make it popular as a tourist site such as featured by Hershey's with its "Hershey World" in Hershey, Pennsylvania. No, this approach is not for the leaders at Mars Incorporated and the company remains highly secretive about its operations. For instance, "Few people realize that this building is the international headquarters of the world's largest candy company -- Mars, Incorporated. Almost everyone has used or seen its products. These include candy bars (3 Musketeers, Milky Way, Mars, M&M's, and Snickers), packaged foods (Uncle Ben's rice), and pet food" (Whiskas and Pedigree) (Anderson, 2004, p. 37).

Today, the company's primary business units are as shown in Table 1 below:

Table 1.

Mars Incorporated Primary Business Units.

Business Unit

Description

Snackfood

This unit is comprised of a number of leading snackfood brands, including M&M'S, Snickers, Mars and Twix.

Petcare

Waltham, the world's leading authority on pet care and nutrition, ensures that all the company's pet food products satisfy the pet owner's desire to provide nutrition as well as the pet's demand for great-tasting food with brands such as Whiskas and Pedigree.

Main Meal Foods

Although better known perhaps for its snack food lines, many of the company's products are main meal items, including Uncle Ben's (which was the world's first mass produced parboiled rice and is still a favorite) as well as pasta and sauces.

Drinks

The company's state-of-the-art vending systems, Klix and Flavia, allow consumer to purchase hot and cold drinks at both work and elsewhere

Information Technology

Mars also makes drink vending equipment and electronic automated payment systems" (Mars, Incorporated company profile, 2007, p. 2). The company states that its Information Services International (ISI) is its in-house it organization: "IT fundamentally supports everything we do, from buying raw materials to marketing finished products" (Mars: What do we do?, 2007, p. 2).

Source: Mars: What do we do?, 2007.

The classic Mars Bar famous the world over today got its start in the 1930s during a period new all types of sweet and chocolate bar were rapidly appearing on the market. In this regard, Bowlby (2001) attributes the quick success of this candy bar to "the inevitability of packaging and the meteoric rise of the Mars Bar launched in 1933" (p. 129). The choice of a name for the Mars product was clearly influenced by the market in which the company was competing. In 1933, British confectionery manufacturers were struggling to keep pace with their American counterparts in coining catchy names for their candy bar lines, and an assortment of these shows what Mars was up against: Angel food, Three Deckers, Bumpers, Hu-Ha, Jakko, Punch, Scrum, Foozely Boo, Rip, Nutzipan, Chumps, Eccos, Choccos, King, Happy Day, Nutz and Humpty! (Bowlby, 2001).

Although the company is privately held, Yahoo Finance! maintains a current business profile for it that states, disingenuously: "Mars knows chocolate sales are nothing to snicker at. The company makes such worldwide favorites as M&M's, Snickers, and the Mars bar" (Mars, Incorporated Company Profile, 2007, p. 1). The company other product lines include:

Musketeers

Dove

Milky Way

Skittles

Twix

Starburst

Combos

Kudos

Uncle Ben's Rice;

Pedigree

Sheba

Whiskas

As noted above, the company is owned and operated by the two brothers and sister whose success rivals that of virtually any other industry today: "The Mars family (including siblings and retired company CEO Forrest Mars Jr., chairman John Franklyn Mars [age 70 years], and VP Jacqueline Badger Mars) owns the highly secretive firm, making the family one of the richest in the United States" (Mars, Incorporated company profile, 2007, p. 3).

Some financial highlights and key executive information is provided in Tables 2 and 3 below.

Table 2.

Financial highlights for Mars Incorporated as of 2007.

Financial Highlights

Metric

Fiscal Year End:

December

Revenue (2005):

00 M

Revenue Growth (1 yr):

Employees (2005):

Employee Growth (1 yr):

Source: Yahoo! Finance, 2007.

Table 3.

Key Executives, Industry Information and Top Competitors for Mars Incorporated.

Category

Mars Incorporated

Key Executives

Chairman: John Franklyn Mars

President: Paul S. Michaels

VP, Treasurer, and CFO R.E. Barnes

Industry Information

Sector: Consumer Goods

Industry: Confectioners

Competitors

Cadbury Schweppes plc

The Hershey Company

Nestle

Source: Yahoo! Finance (2007) and Hoover's (2007).

II. Situation Analysis.

Today Mars Incorporated is an $18-billion business competing in more than 100 countries (Mars: About us, 2007). The company's brands extend across the entire range of consumer products and it commands a leading position in each. According to its corporate literature, the company competes with other international giants such as Hershey and Nestle and with many local candy companies around the world. It has annual sales of about $15 billion, 30,000 employees, and offices in more than 60 countries (Anderson, 2004) and marketing in over one hundred countries on five continents (Mars: About us, 2007). Likewise, the company' corporate literature also proudly notes that, "Mars is a leader in each of its main businesses. Many Mars brands are among the category leaders" (Mars: What do we do?, 2007).

PESTLE Analysis.

This type of analysis is used to examine factors external to a company that can reasonably be expected to affect it in the future.

Political. Because the company competes in more than 100 countries around the world, it is highly subject to changes in political regimens in developing nations where deficient corporate governance and rampant corruption remain significant problems; as noted further below, the company is also vulnerable to unpredictable terrorist attacks on Western interests at home and abroad.

Economic. The company's financial performance appears to remain robust; the company recorded revenues of $17 billion (estimate) during the fiscal year ended December 2003, an increase of 4.9% (estimate) over 2002 (Datamonitor, 2007).

Sociological. Mars is well situated to take advantage of a well-known fact: people the world over love the taste of chocolate and its consumption continues to increase in virtually every country where people can afford it. In this regard, the company's promotional online literature proudly notes that, "Only in the last hundred years have snackfoods become the universally popular products they are today. Mars snackfood brands are among the world's best-loved and most widely available confectionery products, with M&M'S, Mars, Milky Way, Snickers and Twix among those at the top - and in ice cream versions too. Confectionery tastes great, but it is reassuring to know that Mars snackfoods have real food value that adds interest and variety to a normal balanced diet" (What do we do?, 2007, p. 4).

This is not just so much corporate hype either. According to Hui-Lin, Hwa, and Zheng (2001), "The joys of milk flakes, chew bars and energy balls are the stuff of dreams. These dreams translate into an annual consumption of more than a million tons of processed chocolate, with the Swiss leading at about 10 kg per capita, and a USS$13 billion industry in the United States alone" (p. 1).

One of the sociological factors influencing the company's marketing decisions today in the growing Asian market include the fact that the Japanese have not been very receptive to imported chocolates in recent years. For instance, Hui-Lin and his colleagues (2001) emphasize that, "Internationally renowned chocolate makers from Belgium, Switzerland and the Netherlands have had little success in the Japanese market, with the share of foreign chocolates stagnant at around 10 per cent.5 in 1999, Japan bought 16,261 tons of foreign chocolates, while consuming 200,600 tons of domestic chocolates" (p. 2).

Chocolate production by foreign companies under license in Japan have also been relatively unsuccessful for most players. For example, during the early 1970s, the existing market leader in Japan's confectionery industry at the time, Meiji Seika Kaisha, Ltd., gave up on its venture with Swiss Jacobs Suchard after just a few years because it was unprofitable; in fact, the only major foreign chocolate currently manufactured in Japan is Mars Incorporated's Kit Kat bar, but even this candy bar is sold in a much smaller package than in other countries. "Given such preferential consumer demand, most chocolate production is done within the country" (Hui-lin et al., 2001, p. 3).

Technological. Fuji Oil, Nestle and Mars are the only three companies among the top ten chocolate assignees with patents in all relevant patent classes as shown in Table 4 below.

Table 4.

Mars Incorporated Patent Classes: Top Chocolate Technologies and Subtechnologies.

Source: Hui-Lin et al., 2001, p. 8.

With 5 patents each in class A23G 1/18 (Apparatus for conditioning chocolate masses for molding,) Mars, and Carle & Montanari S.p.A. enjoy equal standing; this class is currently dominated by just four competitors, and covers apparatus for conditioning chocolate masses for molding. The other two companies are Meiji and Procter & Gamble with 3 and 2 patents respectively (Hui-lin et al., 2001). Among the top ten patent assignees, Mars and Meiji, having patents in nine of out the top ten technologies in chocolate manufacturing, are the best covered (Hui-lin et al., 2001). These authors maintain that the secret to successful technology planning for Mars and its competitor lies in patent mapping. "Patent Mapping assists in assessing the technological capability of an organization. It serves as a critical starting point for in-depth researches. It also serves as a novel analytical tool for SWOT, Porter's 5 Forces model and the likes. Each patent map reveals a unique aspect of any given technology" (Hui-Lin et al., 2001, p. 6).

When taken in combination, such maps provide policymakers with a powerful analytical tool that can help them better:

Understand the overall state of a technological field

Identify technological activities, pace and trends

Recognize licensing opportunities

Understand characteristics of potential collaborator or competitor

Visualize various paths for development (Hui-Lin et al., 2001).

Legal. None identified.

Environmental. The company is well-known for its proactive stance towards environmental issues, particularly those that may affect its own bottom line. For example, in response to recent cocoa crop failures, the company began working with the Smithsonian Institution to organize the First International Workshop on Sustainable Cocoa Farming (Mars: Cocoa sustainability, 2006). The workshop was held in Panama in 1998 and featured a select group of ornithologists, plant scientists, environmental advocates and chocolate industry scientists that advocated the ideal that cocoa grown within a biologically diverse and environmentally sustainable agricultural system is capable of providing long-term economic, social, and environmental benefits to the millions of smallholder farmers who are uniquely suited to cultivate cocoa (Mars: Cocoa sustainability, 2006). The consensus statement developed at the conference remain in effect to guide efforts by Mars, as well as other members of the chocolate industry, to overcome the challenges facing the cocoa farmers and to better realize the many benefits of the crop; to this end, the principles adopted at the Panama Conference stipulate that a sustainable, biologically diverse system of growing cocoa will:

Be based on cocoa grown under a diverse shade canopy in a manner that sustains as much biological diversity as is consistent with economically viable yields of cocoa and other products for farmers.

Use constructive partnerships that involve all stakeholders with special emphasis on small farmers.

Build effective policy frameworks to support these partnerships and address the particular needs of small farmers for generations to come.

Encourage future cocoa production that rehabilitates agricultural lands and forms part of a strategy to preserve remnant forests and develop habitat corridors.

Maximize the judicious use of biological control techniques for integrated management of pests, disease, and other low input management systems.

In sum, the company states that, "The principles developed at the conference continue to guide efforts by Mars and our industry partners. Mars continues to be a leader in cocoa sustainability research" (Mars: Cocoa sustainability, 2006, p. 3).

SWOT Analysis.

In contrast to the external factors that can affect a company's performance, the purpose of a SWOT analysis is to isolate key issues and to facilitate a strategic approach in terms of both internal and external factors. The SWOT analysis is used to identify the strengths, weaknesses, opportunities, and threats related to the situation. For this purpose, strengths are positive aspects internal to the entity; weaknesses are negative aspects internal to the entity; opportunities are positive aspects external to the entity and possible threats are negative aspects external to the entity (Morrison, 2003) and these areas are applied to Mars below.

Strengths:

Strong brand name recognition among the new candy bar's targeted market.

Efficient domestic and international supply chain already in place.

Competent corporate leadership.

Weaknesses:

The two brothers (John Franklyn Mars and Forrest Edward Mars) and their sister (Jacqueline Badger Mars) are among the richest people in the world, but they are not getting any younger. According to a list maintained by Forbes Magazine, the siblings are tied for number 21 in the list of the world's richest for 2003 and each of them has a net worth of around $10 billion (Anderson, 2004). Overall, their family accumulated fortune places them in the same company as the likes of Bill Gates and approaches $30 billion. According to Anderson, "This figure exceeds the annual gross national product of many countries. This company is secretive. Because it is a privately held company and none of its shares are publicly traded on a stock exchange, it is not required to disclose information about its operations to the general public" (Anderson, 2004, p. 37).

For example, unlike its publicly held competitors, Mars Incorporated does not issue an expensively printed annual report containing its financial statements as well as "photos of happy and smiling shareholders, customers, and workers" (Anderson, 2004, p. 37). Undoubtedly, the company provides relevant financial information to the tax authorities as required by law in the various countries in which it operates and it may also provide financial information to its creditors such as banks so that they will loan the company money; however, this author notes that he does not have any of knowing whether it actually has borrowed any money in recent years because of the paucity of available data about the company (Anderson, 2004).

The company also clearly complies with relevant laws and regulations concerning the treatment of its workers, health and safety of its products, and protection of the environment; based on its current human resources record, the company must also pay competitive salaries and treat its workers well or else it would not be able to attract 30,000 capable and motivated workers and managers that make it a successful company (Anderson, 2004). Notwithstanding these clearly legitimate approaches to doing business, Anderson cautions that these types of companies are being increasingly viewed with suspicion abroad, and their success may backfire on them in some situations in the future:

The two brothers and their sister cannot expect to run such a large company without qualified help. Though this company is certainly unusual compared with other large international companies, is there anything wrong or bad about how the company chooses to organize itself and operate? This type of family-owned company is common in most poor countries. When one reads much of the criticism today about large companies, particularly international, closely held, and family-owned companies, this criticism seems to apply to Mars, Incorporated (Anderson, 2004, p. 38).

The increasingly vocal critics of such enterprises argue that Mars should focus on such objectives as fairness, transparency, accountability, and social responsibility besides - or even instead of - the company's traditional emphasis on maximizing profits. According to Anderson, "These critics might complain that the Mars company fails to achieve any of these objectives except maximizing profits. It is owned entirely by a powerful, rich family, which these critics would regard as unfair. Ordinary people are not allowed to own any shares in the company or influence its operations. If all companies had this type of ownership, stock markets would cease to exist because they exist primarily to allow small investors to trade their shares" (2004, p. 38).

Opportunities:

Increased exposure through carefully administered positioning.

Rapidly aging "baby boomer" generation means there will be more of the older targeted population in coming years.

Many consumers are becoming more health conscious about the snackfoods they consume, and a healthy alternative to existing brands might be perceived as a viable option.

Threats:

Increasing competition.

The company competes on a global basis and is therefore vulnerable to unforeseen disruptive events such as terrorist attacks on Western interests abroad.

III. Review of Advertising.

The importance of investigating the relationship between consumer and consumption is emphasized by Obelkevich (1991) who concludes that, "The Mars Bar, rightly understood, has more to teach us than Baudrillard," (p. 4). Although the company has a long history of aggressively advertising its products through a wide range of media, it does not maintain a public relations office to promote its public image by issuing press releases or holding press conferences emphasizing the wide range of environmental initiatives that it supports (Anderson, 2004).

IV. Review of Consumer (Segmentation - Targeting - Positioning).

Mars Incorporated has already taken steps that will help them promote their new product line by sponsoring various scientific studies of the energy needs of various types of exercise regimens and then providing consumers with just the product they need to satisfy these requirements. For example, according to Mccabe (2002), the findings of one such Mars-sponsored study found that, "Walkers should take more foods with higher energy content to help increase energy intake and provide a measure of protection if the walk becomes unexpectedly prolonged" (p. 171)

V. Advertising Strategy.

In their study, Managing Brand Portfolios: How the Leaders Do it, Lafloret and Saunders report that there are a number of reasons why branding is of growing interest to academics and practitioners alike, including the following:

brand provides functional benefits plus added values that some customers value enough to buy;

It guides the integration of the marketing mix and provides an anchor for marketing tactics and strategy in a turbulent environment;

In consumer durable markets -- where variants of products are only on the market for a short time -- the brand is essential to retaining consumer confidence and recognition;

The advertising industry has sought to use the building of a brand franchise as a way of countering the increase in sales promotions, and particularly its value-based promotions, as against advertising;

In an attempt to increase the perceived value, companies have added brands to their balance sheet. Rank Hovis McDougall has been a leader in this and, in late 1988, added over $1 billion worth of brands to their balance sheet and in so doing tripled their recorded shareholders' funds overnight. Arthur Young and Company found that 25% of the companies they surveyed included some amount for brand names or intellectual property in their accounts;

Brands are a major reason for making acquisitions; in 1988 the acquisition of such brand names as Kit Kat, Quality Street, Smarties, Rolo, and Yorkie was the reason for Nestle paying six times the book value of their Rowntree acquisition;

Companies have become increasingly interested in making use of their existing brand names for brand extension and umbrella branding; however, studies have shown that umbrella name brands did worse than brands with new names in five U.K. And U.S. markets they analyzed;

Corporate identities and brands often appear together on an offering (Lafloret & Saunders, 1994).

These issues hold some important implications for Mars as it seeks to carve out a new market for its energy bar. For instance, in the automobile market the joint venture between Honda and Rover to produce their respective Legend and Stirling brands resulted in their pursuing opposed branding strategies; although Rover extended their luxury "Rover" brand name throughout their entire product range, Honda elected to establish an independent Acura division that concentrated on the performance and quality-sensitive segment of the car market (Lafloret & Saunders, 1994). Likewise, Cadbury, Mars, and Nestle have competed in the confectionery market for a number of years and these competitors frequently attempt to match each other brand for brand; however, their respective branding strategies remain significant different for these purposes (Lafloret & Saunders, 1994).