Strategy: Mars ice cream case

After analyzing the business case, here are my answers to the questions:

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

Mars´ main strategy was to use high-quality ingredients in their products. They made important advertisements all over Europe in order to promote their products and their high quality. Their strategy also included a higher price than the one for similar products; this is a way to differentiate Mars from the other products, because this price reflects that Mars´ quality is higher. When consumers see the price, they associate higher prices with higher quality.

It is also interesting the fact that Mars products look the same all over Europe, so consumers can buy them without any doubt when they are travelling or when they change their home. Same product, same appearence.

 Mars also spent a lot of efforts in freezer distribution, but this strategy worked much worse than for other well established companies, like Nestle and Unilever. These two companies offered free freezers to shops with the condition that these freezers would only be used for their products. Big supermarkets didn´t need them, but it was a good strategy within small shops. Mars could not compete with this: Mars´ products were not allowed in Unilever and Nestle´s freezers plus Mars was focused in one kind of product, while the other companies were diversified. Mars had to share the freezers with dessert ice creams, children´s novelty ice creams… from other brands, because retailers needed to sell different products. 

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

In my opinion, Mars has to change its strategy in order to make profits. I don´t think the actual one is working properly, not even in the long run.

 The first mistake I find is the one factory in eastern France. It could work with a smaller market, but if they want to distribute their products all over Europe, which is the case, it´s not the smartest strategy. The transportation costs are extremely high as the products need freezers. Maybe having several factories or storage places around Europe could decrease these costs. They could also share transportation costs with other small companies that will distribute their products in the same shops. 

The actual strategy makes it difficult to have profits. Small shops cannot sell big amounts of Mars and, as the cost of transporting Mars to these shops is high, this is a big problem. The most efficient transport is that to big supermarkets, because they can sell bigger amounts of Mars´ products, so transportation costs are worth in these cases. Mars could focus only on big supermarkets, but small shops sell lots of snacks, so I don´t think it´s the best option. If Mars wants to sell its products in small shops and have benefits, they must change their transportation strategy. Besides sharing transportation costs, as mentioned above, they could try to reach an agreement with Unilever or Nestle in order to share their freezers, but I don´t think that these companies have a big interest in these negotiation because they are much more powerful than Mars right now. 

It´s true that the high quality of the product helps to differentiate it from the other sweet snacks, but not all snacks´ consumers are searching for high quality. Anyway, the advertisement seems to work because, even with all the difficulties the product has faced, at least there were no losses. Advertisement is important to have loyal consumers searching for quality and I think they should focus on advertisement to make more people aware about the quality of their products, because each day society is demanding healthier products.

Unilever and Nestle competition is a risk. They are not selling so high quality products, their prices are lower and they are diversified. Mars has to face the fact that many people will buy cheaper snacks, caring only about the taste and price, and that diversified companies have a higher chance to succeed in small shops. Mars´ new strategy must consider all these threats in order to succeed and make profits. Mars could expand their businesses and produce dessert ice creams… several products that can be distributed and storage together and that can help to create loyal consumers, buying all these similar products from the same company, because right now, if a consumer wants a Mars ice cream bar and a dessert ice cream, the dessert ice cream would be from another brand.

To sum up, Mars should change its strategy: diversify the products, face the problem of the high distrubution costs and continue betting on the quality of its products, because is what makes them different from the ones sold by other brands and without these differentiation, they would be in a worse position.

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