Tuesday, June 21, 2016

Perspective - Mars Incorporated : Sweating it out in United Kingdom || Anmol Sharma || Saransh Shah || SPJIMR, Mumbai || March 2016 edition

 Mars Incorporated : Sweating it out in United Kingdom


-ANMOL SHARMA & SARANSH SHAH
SPJIMR, MUMBAI

Overview



Mars Incorporated suffered a huge decline in its sales during the year 2010 in United Kingdom. This event was triggered despite a huge investment in marketing campaigns which were centred around 2010 Football World Cup. Many reasons have been identified for the brand’s declining sales;
primary reason was the poor performance of England’s football team which impacted the sales negatively as the event was Mars Incorporated primary marketing focus of the year, secondary reason was the underperforming Mars Delight and Mars Planets – Product line extension. But this was not just limited to the new product launches; rather the star products of the brand Mars Bar and Galaxy were also experiencing declining sales which suggested that Mars was losing its relevance in the context of customer choice and trends in the chocolate confectionery market.
Snacking occasions have gained increased popularity in UK. But with increased disposable incomes and frugal mind-sets of the customers, health is also gaining importance as people become more conscious about the foods that they consume. Thus, it becomes extremely important for the choco-
late manufacturers to enhance the perception about their offerings at times like these when the higher cost of raw materials had to be passed onto the consumer. By its very nature, chocolate confectionery consumption is inherently indulgent, and the consumer purchasing trends shows a shift towards more premium feel giving products which satiate the cravings but are less detrimental to health. Increasingly, shoppers are looking out to enjoy the chocolate confectionary consumption
in the company of their loved ones and close friends. According to the data provided by the Data Monitor, 4 trends have been identified which make the consumers pay a premium price to obtain the benefits associated with Chocolate.
This article analyses Mars marketing strategy alignment with these trends and what actions it can take
to increase its appeal to the targeted audience.
The trends explained are as follows:-

  • Health

Consumers are shifting their focus onto the products which satisfies self-entitlement and “Better for you” positioning and are not willing to comprise either on health or on sensory appeal. The insight for the chocolate confectionery manufacturers is to alleviate the guilt associated with chocolate consumption. Following this, Mars has reduced its saturated fat content without a compromise on the flagship taste and has moved towards communicating this to its consumers.

  • Sensory Appeal

Affordable Indulgence, affordable health and the demand for premium products govern the consumer purchasing trends. More revolutionary and contemporary product packaging for the chocolate countline (the bars which can be consumed in a single sitting) sector gives product an upscale image and entice the end users. Though Mars packaging is universally recognised with the black-red, but some experts see it as misaligned with more modern and stylish offerings.

  • Comfort

Escapism has been identified as the key driver as the consumers are looking for temporary breaks
from the pressures of the everyday life. This has led to nostalgic themed marketing campaigns and
product launches. While Mars has successfully tapped into the potential of nostalgic themed
campaigns but the 2010 World Cup campaign failed miserably as it relied too much on the external
factors.

  • Sharing

Desire to maximize time spent with family and friends and the need for saving money by visiting bars and restaurants less has resulted in more socializing at home with affordable indulgence as the social facilitator. Mars lost out in the market as the flagship countline bars have not been positioned to resonate with shared feelings and do not lead to increased number of shared occasions. Thus the brand extensions have been rendered useless as they failed to capture the heart and mind share of the
customers.

Analysis

Mars needed to align its marketing strategy so as to ensure that the brand resonates with the consumer preferences, attitudes and behavioural traits. During the year 2010-2015, UK countline market was stagnant, with market witnessing incremental growth in value during the period 2005-2010. This was mostly contributed to the rise in prices of cocoa and sugar, which was passed on to the customer rather than a shift in consumer’s preferences or change in shopper patterns. Data Monitor analysis
states that this trend (product prices being inflated due to high raw materials costs) is going to continue for a while before a quantum shift occurs in consumer’s needs and demands.
However, experts also predict that the market will continue to experience incremental value growth, as the consumers move towards uncertain and unpredictable future (long term implications of austerity measures), they will be moving away from the products which do not add value in comparison to the costs incurred without much innovation. Mars needs to drive a wider wedge between the willingness to pay and costs to show an adequate value addition. Though the market expects that there will be spurt in short burst of indulgence moments in consumer’s lifestyle and additional pressures from the work, economic uncertainty will drive the demand for comfort foods offering indulgence and escapism. Chocolate countlines remains the largest category followed by boxed chocolates.
During the span of 2005-2015, boxed chocolates experienced a double digit growth to become the
second largest category, which shows that the consumers are shifting to confectionery offering which are positioned around sharing.
Figures by AC Nielson reports, there were mixed gains by most chocolate confectionery manufacturers, with Cadbury leading the category with gains of about 36.5 million Pounds (achieved by the launch of Cadbury dairy Milk Caramel nibbles in UK) with Galaxy on 2nd position
(introduction of newer product formats – Galaxy bubbles and Galaxy Counters). But it was not as rosy for Mars which lost 5.7m pounds in revenue and Cadbury Roses experienced a sales dip of 4.3m pounds.

Mars – Performance Review

Mars suffered a huge dip in its sales of about 17.2m Pounds (Y-O-Y decline 14.2%) while volume sales fell by 13.9%. Mars bar also took a hit of 6% which was quite opposite as experienced by the
competitors. It was attributed to dip in sales of Mars delight and Mars planets while novelty and Easter lines also underperformed.
Mars bar sales dipped even after a huge spend (7.4m Pounds) on advertising:

1) Repackaging the bars in St. George’s cross wrapper
2) Getting ex-footballer John Barnes on board to replicate his part in1990 New Order music video – World in Motion (official song – England Football team) for the
Jun-Jul 2010 WC.

Research shows the association with sports can help boost the domestic sales of perishable products, if the national team performs well a positive sentiment is parlayed amongst the consumers which improves belongingness and willingness to pay. As more people try to socialize at homes, chocolate confectionary manufacturers use ethnocentric related marketing during big occasions. The marketing campaign was heavily reliant on the performance of England football team, which had a significant
impact on Mars World Cup promotion. The association is a remembrance of poor performance of
the team and negative allegations, behind the scenes fights rather than any success of the field. Survey (Magnum) showed that the event was the low point of summer for 60% British men and 53% women. This is hardly the kind of sentiment which makes the customers go for the repeated purchase behaviour even in limited edition packaging. Mars lost out to competition just on the marketing forefront heavily which transpired into a dip in only its sales across category. It is important that there is a need for constant innovation assisted by relevant marketing to make the customers loyal to a brand. One aspect of this is customers will continue to seek out comfort foods like Mars bars for temporary get away from day-to-day stress and experience indulgence. And the other would be, customers trying to save by reducing their consumption of chocolate confectionary, as they view
confectionery as an unnecessary cost. Mars can look into its value addition by offering healthy variants, different flavours and leverage traits like indulgence, comfort and silky smooth experience to retain their share of pie.
Mars also faces a stiff competition from the unbranded confectionery (locally manufactured, retailers own brand) during the product placement and thus obtaining the necessary attention. According to Richard Buchanan, Director Branding agency The Clearing, Mars packaging was losing relevance and their much touted “Better for You” positioning was generally perceived to be feminine. The trends have gained momentum since then as now newer products are being launched with more health quotient (lower saturated fat content, high quality cocoa bean, dark chocolate as natural anti-oxidant). If chocolate manufacturers can overcome the feeling of guilt related to the ingredients of the products with healthier positioning, they will find themselves in a very sweet spot to capitalise on consumer’s desires for moments of indulgence, socializing with family and friends and comfort which will help drive their sales. The next best positioning could be to position Mars as a snack, to
cater to snacking occasion which is quite prevalent in UK.
In 2010, Mars officially announced that it has reduced its saturated fat content with the help of ATL advertisements targeted towards weight management issues. The company is said to have invested 10m euros and 40000 hours in R&D to ensure that the product tastes the same. Mars counted on this as the product differentiation strategy.
Over the years there have been many relaunches such as Cadbury Wispa, retro packages like Walkers introducing original “Monster Munch” pack, Cadbury’s reintroducing caramel bunny and Mars relaunching its Milky way - “the red car and the blue car had a race” advertisement. In 2008 Mars revived its “Work, Rest and Play” strapline which was relieved in 2005. The ad featured monks who conducted bell duties before and after having Mars bar working in energetic manner, with song “Jump around” in background. This led to an increase of 5.7% in sales which prompted Mars to
relaunch the ad campaign to garner attention Product packaging has also taken a quantum shift towards the more premium side. Although, the aim was to establish a brand image as balanced nutrient diet, the stylish packaging of the county line confectionery like Green & Black’s and Cadbury Bournville, intimidated Mars to offer attractive packaging to enhance value add like reward
and indulgence. Similar views are received for other Mars brands like Snickers and Milky Way bars. Website Ezine- Mark quoted in its article “Chocolate Packaging in HD photo”, packaging is the glue that connects reason and logic with imaginations and feelings and it can stimulate the consumers.

Analysing the 2010 Football World Cup campaign Mars WC marketing campaign of 2010, had John Barnes re-enacting his vocals from “world in motion” 1990 song by New Order, official song of England’s world cup campaign. The 30 second commercial was slighted tweaked to incorporate word “Mars” into its lyrics. It was a part of 7.4m Pounds deal between Mars and Football association.
Official sources reveal that the song was amongst the country’s top 3 WC songs, even after 20 years of its release. Internet blogs were flooded with the excitement around this as this was a part of John Barnes rap. However far away from lifting the spirits of fans, England’s team poor performance and miserable oust lead Mars to lose out on capturing the ethnocentrism which would have increased
its presence in European markets. It left an alienated impact on the brand ensuring that Mars does not
become a permanent part of customer’s shopping cart. Mars recognised the growing trends of “sharing” in customer’s behaviour to purchase chocolate for spending quality time with family and friends, and launched Galaxy counters and Mars planets to capitalize. This is similar on the lines of Cadbury’s product portfolio. But Mars never launched its flagship Mars bar in sharing format except
for the Mars fun size bags maybe to preserve its Brand equity and brand image but some experts review this as naïve approach since competition is already reaping the benefits from it.

Recommendations


  • Health

Maybe the reduction in saturated fat content made the consumers perceive an adulteration in taste which is the key driver of the category. Perhaps to highlight the increased value add (health benefits) be printed on the packaging and making the customers experience similar tastes as before can help Mars retain its loyal customers.


  • Sensory Appeal

Product packaging can be improved to give a new rich premium feel. Don’t change the basic appeal of the brand design, but basic changes like borderlines, rich cocoa colour (Cadbury’s Bournville) can help emphasize the better product.


  • Comfort

Mars has to count on its own heritage if it were to capture a larger share of market. Maybe packages targeted towards family consumption be promoted to offer more comfort in socializing at home

  • Reach

Multiple SKU’s across multiple channels will ensure brand presence and increase penetration by increasing the reach to the consumers. Channel differentiation strategies like tie-ups with online retailers can also help create exclusivity for its product.

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