Blog Strategy: Mars Ice Cream

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

As a well-known brand in the world of chocolate the strategy that this company used were according to the status that they have in the chocolate bar market. The main vision of mars ice cream was high-quality ingredients, such as real cream and real chocolate, the use of significant advertising support across Europe and the establishment of a new premium-price category in the market place.

The problem is that the chocolate bar and ice cream markets are totally different even thought you are selling the same vision and a similar product. They did a poor research in this kind of market thinking that it would have the same success than the bars implementing the same kind of strategy. The biggest mistake was not taking in account the distr

ibution process (distribution frozen chain) and the instruments required to sell it such as the high competition to place their products in small outlets freezers.

They had to face companies such as Unilever and Nestle with a higher purchase power and a

huge range of products in the ice cream market. Theses companies did a good strategy to place and differentiate their products giving for free special freezer cabinets just for them. In most of the markets Mars did not have access to these freezers so they found a huge problem to place their product. Even the small retailers were aware of the interest of the costumers in the products offered by this c

ompany. They were required to be followers in terms of strategy so the competitors are always one step forward preventing any kind of benefit in this market for Mars. That is the why they do not have profits since 2000.

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

From my point of view it is obvious that if they still having the strategy of being a follower of the big brands of this market they will never achieved profits in this sector. I would recommend them to change radically their strategy in terms of distribution and placement. It would be great if they reduce costs of frozen supply chain needed to transport their products, building a new factory nearest to the more profitable markets however this action would mean a huge invest that would have to face the main problem of this market, the competition.

Brands such as Nestle and Unilever have a purchasing power higher than Mars Ice Cream. So Mars cannot compete with this brands in this market. They offer a wide range of product with so many facilities that make almost impossible the successful implementation of any direct competitor. The best example is the way that these companies are buying the brands that could affect their premium position such as Lion Maid and Miko leaving Mars alone in the distribution market. This fact will increase the distribution and placement cost becoming increasingly difficult to be profitable. 

Comments Off on Blog Strategy: Mars Ice Cream / 05 Dec 2011 por Antonio Calixto Moreno Zarco
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