Marketing Problem of Mars Company

Issue

Chocolate tablets of Mars

In Mars chocolate portfolio tablets were not the main products and Mars has only one representative brand, Dove chocolate. Mars Company made re-launching of the brand in 2015 with new design of product. There was done full modification of this brand. Mars decreased weight of chocolate to 90 g from 100 g, new type of re-closable packaging instead of carton pack. Mars Company changed secondary packaging – now without case (company decreased Manufacturing Conversion Costs by 10%). Company moved production line to Odintsovo Confectionery in Moscow region, current Logistics Conversion Costs have increased by 12%. Mars Company changed the price of Dove chocolate by increasing from 370 to 420 KZT on ledge followed category trend on price increasing during 2016 Challenging business model that limits brand support.

Marketing supporting of Dove chocolate

In the current time only three out of nine Mars brands having its marketing supporting dominators in its portfolio – Snickers, M&Ms, and Twix. This marketing supporting consists of TV advertising (52 weeks), Billboards & Digital supporting promo-campaigns, and one BTL campaign per year on each of the three brands. Bounty, A. Korkunov and Dove did not have any marketing support from the beginning of 2014. At the moment Mars’ competitors hold more stable positions in regard to the promotion of their products and organizing of promo-actions, especially in modern trade channels.

Due to this challenging business model, Dove brand supporting in KZ was limited by several factors:

a) Television support and advertising was stopped in the beginning of 2014.

b) Since 2013 Dove had no outdoor media advertising.

c) Dove is not in the scope of Mars chocolate digital campaigns.

The tablet range is supported by distribution with focus on modern trade; traditional trade supporting is limited to A and B category stores. Further brand supporting is the objective to business model: the possible plan of price increasing would allow the restart of brand support. Because of these factors sales of Dove chocolate decreased in Kazakhstan market. Dove Company stopped promoting Dove chocolate in Kazakhstan since 2014 and stopped outdoor media advertising. Limitation of advertising and promotion led to decreasing of sales, with rising of the price of Dove chocolate. According to researches consumers prefer brands of competitors more, because they having lower price, memorable packaging and good promotion, like Albeni chocolate.

In Kazakhstan Dove chocolate selling in two packages 40 g and 100 g, and represented in three different sorts of tastes – milk chocolate without additives, dark chocolate, and milk chocolate with cobnut. In Kazakhstan research was done regarding chocolate brands which were sold in Kazakhstani market, and was conducted that the higher the degree of refinement, the more tender the taste. All applicants had the degree of crushing of cocoa products in accordance with the regulations, but milk chocolate Dove has the highest index.  The sale of Dove chocolate is influenced by factors such as fertility levels and standard of live in Kazakhstan. Main consumers of this chocolate are people from 18 to 30 years old, people who know more about technological innovations and reading a lot in Internet.  Even though advertising was carefully designed and the product is clearly positioned, some customers still regard this chocolate skeptically, fundamentally refusing to buy it. The thing is that Unilever has in its portfolio the brand Dove soap and shampoos. In this regard, many people just think that chocolate is tasteless and smells like soap. There is nothing in common between these goods. Fonts and the pigeon (dove) symbol used on packages of goods are similar. This can be seen when comparing them.

Thus, the company of bringing chocolate Dove to the Kazakhstan market did not meet expectations, although the peculiarities of the economic situation in the country were considered, as well as the segmentation carried out. Even though the sale of premium class chocolate in Kazakhstan is promising, the company can take at most 15% of the market at best, but it firmly holds 2/3 of the market of chocolate bars. Here you have to specify which is not successful and which taking 2/3 of the market, I got confused Mars Company collided with the problem of low sales of Dove chocolate in Kazakhstan, despite of all positive factors which Dove chocolate has among competitor’s brands. Researches conducted that milk chocolate is not so popular among customers in Kazakhstan. Mars Company analyzed that there were possible reasons of bad selling of Dove chocolate.

The possible most typical mistakes in the development and derivation of a new commodity market are considered, among which one can distinguish:

1. Incorrect segmentation;

2. Unclear positioning;

3. Non-conformity of the goods to the target market;

4. Counteraction of competitors;

5. Inaccurate choice of pricing strategy.

The following conclusion was made: knowledge of these errors will allow considering the probability of their occurrence, as well as help to avoid the most typical problems when developing and launching a new product on the market. Is this really necessary to say? May be something else to finish?