Mars Bar Marketing

The Marketing Strategy for the Mars Bar in the United Kingdom

In this report a strategic analysis will be made of a Mar’s Bar (as opposed to the Brand) I think you have this wrong – a Mars Bar is a mix of milk, chocolate, glucose, etc! – you mean, I think, a review of Mars Bar as a product, rather than a review of the Mars Company as a whole. Mars is both an item of confectionary and a leading global brand recognisable almost anywhere in the world. NO, Mars is a global confectionary brand and the Mars Bar is one of its flagship products! There will be a detailed examination of the integration between strategic aims and marketing actions. Mars strategy and relationship between its target market segments will be examined, along with its products and services offered to the different customer groups and promotional activities.

The links between the external environment, (PEST, Porter), business strategy and marketing will be evaluated.

A Mars’ bar is in essence chocolate-malt nougat topped with a layer of caramel and covered with milk chocolate. In the United States, it is known as the Milky Way bar. (There was a Mars bar in the United States, but it was discontinued in 2000. It was then re-launched under the new name the Snickers Almond bar.)

Mars Incorporated is a family owned company that produces some of the world’s leading confectionery; food and pet care products and has a growing beverage and health & nutrition businesses. Headquartered in McLean, Virginia, Mars Incorporated operates in more than 65 countries and employs more than 40,000 associates worldwide. The company’s global sales are approximately $21 billion annually.

Founded in 1911, the company manufactures and markets a variety of products under many of the world’s most recognizable trademarks, including MILKYWAY®, M&M’s®, SNICKERS®, MARS®, UNCLE BEN’S® Rice, and PEDIGREE® and WHISKAS® pet care products.

Frank Mars was born in Minnesota, USA in 1882. Due to mild polio his walking was impaired. His mother taught him to hand dip chocolate as a means to keep him entertained. Frank married in 1902 and in 1904, Forrest Mars Sr. was born, in Minnesota.

Frank Mars and his second wife started making and selling butter cream candies from their third home in Washington, in 1911. This led them to renting their first candy factory, the Mars Candy factory Inc, which employed 125 staff. In 1920, Frank moved to a larger site in Minnesota, which he called nougat house. The Mar-o-bar was introduced to the candy range in 1922. With a larger site for distribution of this candy the Mar-o-bar company was launched. After three years of researching, the Milky Way candy bar was introduced and was an instant success. Sales increased and more staff were hired. In 1929 Mars incorporated, now with 200 staff, relocates from Minneapolis to Chicago. The central location of Chicago offers a better railroad access to the rest of the country. The Snickers bar is launched in 1930. Forrest Mars Snr arrives in the UK, in Slough to start his own business in 1932. The Mars confectionary business diversifies with the acquisition of the dog food business in the UK.When?

Porter’s 5 Five Forces Analysis of Mars Bar

Power of Suppliers

The power of suppliers is low. As supplies are mainly commodities – cocoa, sugar, malt etc. there is low differentiation in the supplies. Therefore Mars can afford to be sensitive to the cost of supplies, and can easily switch to a more favourable supplier. The Labour force is largely non-specialised, and thus the power of the unions can be assumed to be low. This puts the employer at an advantage when it comes to negotiating the cost of labour.

Forward integration by Mars’ suppliers is unlikely due to the current oligopoly in operation, where brand strength and market share of the main players would make it difficult for new entrants to achieve the high volume of sales required to return a profit.

As a large multi-national corporation, Mars may be significantly bigger than some of its suppliers. This will give Mars an advantage in negotiations.

Power of Buyers

The power of buyers is low, but can be said to be higher than the power of suppliers. Because the price sensitivity of buyers is low – Mars bars are a relatively cheap product - there is some potential for Mars to raise its prices without this having a significant impact on sales. The significant brand strength of the product makes it important to the buyer, in terms of wholesalers and retailers. Ultimately retailers need to sell Mars bars, therefore reducing their power to negotiate with Mars on price. Also there is a low threat of backward integration by buyers due to Mars’ brand strength. There has been some backward integration from supermarkets own-brand products, but this has not resulted in supermarkets being able to stop supplying the Mars bar.

The low costs for buyers to switch between rival products bring some power back in their favour. Also the size of the Mars Company and the size of its suppliers (wholesalers and supermarkets) is similar – there is no clear imbalance of power between parties.

Threat of new entrants

The threat of new entrants is low. There are high entry costs to this market - it costs a lot of money to produce and market a new competitor from scratch. The threat is more likely from existing food companies e.g. Kellogg’s cereal bars.

Economies of scale are a barrier – a small profit margin (for example, just 0.5p gross profit per bar of Kit Kat [which is actually a Nestle product! – why pick this as an example?]) means that larger volumes need to be produced and sold to make a profit. This denies the opportunity for new entrants to develop their market share gradually over time.

The extent of product differentiation in the market means that there is high brand recognition for the main products, which a new entrant would have to overcome. This can be considered extreme for Mars, where the brand has been used to launch additional products such as Mars ice cream, cakes and milkshakes.

There may also be barriers for new entrants to channels of distribution. Retailers may be unwilling go to commit valuable shelf space to un-proven products. In addition, the existing companies may bulk-buy shelf space, thus reducing the availability to new entrants.

In favour of new entrants, there are few legal barriers to entry, though the requirements relating to food hygiene are strictly enforced. The risk to a company’s reputation for failing to follow these requirements are significant e.g. the salmonella outbreak in a Cadbury’s

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