Term Paper on "Advertising on Mars Bar"

Term Paper 17 pages (4631 words) Sources: 20 Style: Harvard

[EXCERPT] . . . .

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… READ MORE

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