Mars and its Ice Cream #Strategy
Summary of Mars’ strategy to launch its ice cream products
Mars introduced ice cream into the market and wanted to build on the success of the Mars bars and branded the ice cream in the same way. They used high-quality ingredients to implement a new premium-price category in the market. With their strategy they reached a share of 10-20 % in the chocolate ice cream bar segment.
If we consider Porter’s Five Forces we see that there is a barrier to enter the market: the freezers. The strongest competitors Unilever and Nestlé provided free freezers to retailers exclusively for their products. To get a foot into this segment Mars made agreements with second or third position companies. Unfortunately in the UK and in France these companies were bought by Nestlé or Unilever. Mars faced also many substitute products. Hence the power of the customers and the suppliers was high. In addition Mars only provided ice cream but the retailers preferred a greater variety. For this reasons Mars was not very successful with its strategy and made no profit with its ice cream up to the mid 2000s.
Why Mars has to change its strategy and how it can make profits from its ice cream operations
If Mars continues with its strategy it will not make significant profits from its ice cream operations. Unilever and Nestlé are very strong competitors and Mars Ice Cream is just one among many ice creams.
To overcome these barriers Mars has to define its key success factors and its vision. It has to decide if it wants to follow the Cost Leadership Strategy or the Differentiation Strategy. Since it uses high-quality ingredients and has strong competitors the latter would be appropriate. It is important to sell the uniqueness of the Mars Ice Cream. From the perspective of the consumer Mars has to sell not only ice cream but a way of life with all its benefits and emotions.
The strength of Mars is that it has already a brand and a memorable logo. Now it is time to think about what could make Mars Ice Cream more attractive to the retailers. This could be a wider product range or an agreement with Unilever and/or Nestlé to simplify distribution channels. Furthermore Mars can announce a competition between the consumers and use the crowdsourcing potential. The best idea of the competition will be the basis for the next campaign.
Comments Off on Mars and its Ice Cream #Strategy /
04 Dec 2011
por
Marie Glueck
IMSD /
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