Strategy: Mars ice cream distribution problems

Mars has built over the last years a share of between 10 per cent and 20 per cent of the chocolate ice cream bar market.  They are recognize for using high-quality ingredients, and thanks to the significant advertising support across Europe, they have created a premium-price category. Mars produce all their products at one factory in eastern France, which is a good location and it´s very well communicated for the product distribution.

In order to reach all consumers Mars has invested a considerable effort in the freezer distribution, but not only because of the need for frozen storage and vehicle transport the retail outlets involves high costs, but also because of the low unit cost of the items carried and the small drop sizes of the orders.

With the objective of solving this problem, Mars tried to follow the competitor Unilever`s strategy, were they offer freezer cabinets for exclusive use of its products, but it wasn´t that easy for a smaller brand such as Mars, which has less variety of products to distribute. Mars tried in different countries to make distribution agreements with smaller ice cream companies, but most of them failed once they were taken over by Nestlé or Unilever.

According to the freezer cabinets which Mars sold or make loans to the retailers customers, Mars had to accept the possibility of allowing this clients to use the cabinets to store other shorts of demanded ice creams which  Mars didn´t sell and they had to order to other suppliers, in order to maintain the sales to retailer customers.

 

After having a look to Mars ice cream`s distribution strategy problems, the possibility of making significant profits with the sales of these products seems to be quite pessimistic.  But once we have recognized the problem, a good frame to start working with could be evaluating what they are  doing wrong and how can they solve it.

For instance, traditions and culture differ one from the other European countries. A new strategy might be focusing on the countries with the more significant potential sales and create specific marketing strategies for this areas in order to increase the sales.

One of the problems with the retailers customers was that Mars didn´t sell dessert ice creams, bulk packs or children´s novelty ice creams, and this clients had to order those to other suppliers. The solution to solve this problem might be the option of expanding the range of the product line to meet the demand. This might need a previous investment, but the possibility of increasing the market sales could be very attractive.

Even though making significant profits with ice cream operations seems to be quite complicated, I´m very optimistic thinking that it´s all about strategy. So once they discover the adequate one, they will be able to succeed on their transactions, as Mars is a well known and high quality brand.

 


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