Mars IceCream Strategy

How would you resume the strategies adopted by Mars to launch its ice cream products?

Mar s strategy can be resumed in two main concepts: take advantage of your strengths, and be innovative to overcome your weaknesses.

Taking ad vantage of strengths

Mars had a highly consolidated brand position in the sweet snacks business, and followed the tactic of translating this image to its new ice-cream goods. How? Basically by making products similar to the snacks, resembling them. This, with the use of quality material to make very tasty products, allowed it to establish a new premium price for them.

Customers will not be willing to pay a high price for what they don’t know. But as they know Mars, and like it, they try it, and since it’s made of high quality materials, keep on consuming them. Something “tasty” for the investors: a high growth market with high prices.

Also, another clear example of exploiting your strengths is the use of the excellent and long-standing relationships with the grocery trade for distribution.

Fighting your weaknesses

Main weakness was logistic, with a clever entry barriers imposed by the two main competitors: Unilever and Nestle. They provided with free freezers to small shops, but only their items could be showed in them.

Mars came up with an innovative idea for this: they financed and sold freezers to the shops, but allowing them to show other products in them. This allowed to come across a business scale problem in the beginning of the operations. And for a small shop is more attractive to have this kind of deal, as they can show different items in the same freezer.

It also partnered with many small but considerable national companies, to gain strength in each local market.

Do you think that Mars will ever make significant profits from its ice cream operations? Why? How?

Mars will make a singinifant profit in the long run. Considering that they have a premium product price, their unitary contribution is higher than the one of their competitors. They have come up with an innovative tactic to fight their main problem and cost (logistics) and they have won a considerable market share as a result of that. If they continue with this increase, they will have the necessary volume to reduce logistics cost and have a huge profit.

However, they should consider that their main customers pay a premium price for their products. With the current on-going crisis in Europe, customers may be willing to consume cheaper products. And new customers may not be a easy to seduce as they used to be. This should be considered in order to evaluate a “roof” for their sales.

If this maximum achievable sales does not give the necessary volume for the expected profit, then they should consider new strategies: one can be reducing prices (which will lead to new volumes, and related necessary investments); the other producing second-brand products, with lower costs/prices. The second strategy will keep the high contributions of the main brands, and these can reduce logistic costs as synergy with the second-brand products. Investments will be necessary as well.

7 comentarios / 04 Dic 2011 por Federico Camino
MERME /

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