CASE ANALYSIS
Mars Inc.: merger of the European food,pet care and confectionery divisions
Mars Inc. is adiversified multifunctional company whose primary products includefoods, petcare, confectionery, electronics and drinks. Owned andcontrolled by the Mars family, this US giant is one of the world’sbiggest private companies, but also one of the most secretive.Mars’ decision in January 2000 to merge its food, pet care andconfectionery divisions across Europe – and eventually withheadquarters in the UK – has split the marketing industry. The mostwell-known brands within the three divisions are:
- Foods: Uncle Ben’s rice and sauces;
- Pet care: Whiskas, Pedigree;
- Confectionery: M&Ms, Snickers, Milky Way, Mars Bar.
Mars UK says thedecision to pool the businesses was taken to strike at thecompany’s international competitors in food and confectionery, suchas Nestlé and Unilever. The move also coincides with plans tocreate a single European market and highlights the company’s beliefthat its consumers’ needs are the same across the continent.However, the combination of food and confectionery with pet care isnot clear to all industry observers. One industry analyst made thecomment: Generally speaking, Mars is doing the right thing bymerging divisions to squeeze profits out of them. Before the adventof the euro it was acceptable to run separate companies indifferent European countries but not anymore. Another analystsaid: ‘I can’t imagine it marketing all three sides of the businesstogether. They’re too different.’ The only visible benefit appearsto be an improvement in distribution. Tastes across Europeanmarkets are very different, whether you’re selling products foranimals or people It’s all very well Mars saying it will tacklecompetitors such as Nestlé and Unilever, but they are only rivalsin food and confectionery. If Mars starts laying down too manycontrols by merging all its businesses – and therefore also itsmarketing and management strategies – it may streamlinecommunications, but could lose the creativity available indifferent regions.
Questions:
1. Discuss the two views of organizing Mars’ Europeanactivities.
2. Did Mars Inc. do the right thing in your opinion?
