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Mars Inc.: merger of the European food, pet care andconfectionery divisions

Mars Inc. is a diversified multifunctional company whoseprimary products include foods, petcare, confectionery, electronicsand drinks. Owned and controlled by the Mars family, this US giantis one of the world’s biggest private companies, but also one ofthe most secretive. Mars’ decision in January 2000 to merge itsfood, pet care and confectionery divisions across Europe – andeventually with headquarters in the UK – has split the marketingindustry. The most well-known brands within the three divisionsare:

• Foods: Uncle Ben’s rice and sauces;

• Pet care: Whiskas, Pedigree;

• Confectionery: M&Ms, Snickers, Milky Way, MarsBar.

Mars UK says the decision to pool the businesses was taken tostrike at the company’s international competitors in food andconfectionery, such as Nestlé and Unilever. The move also coincideswith plans to create a single European market and highlights thecompany’s belief that its consumers’ needs are the same across thecontinent. However, the combination of food and confectionery withpet care is not clear to all industry observers. One industryanalyst made the comment: Generally speaking, Mars is doing theright thing by merging divisions to squeeze profits out of them.Before the advent of the euro it was acceptable to run separatecompanies in different European countries but not anymore. Anotheranalyst said: ‘I can’t imagine it marketing all three sides of thebusiness together. They’re too different.’ The only visible benefitappears to be an improvement in distribution. Tastes acrossEuropean markets are very different, whether you’re sellingproducts for animals or people It’s all very well Mars saying itwill tackle competitors such as Nestlé and Unilever, but they areonly rivals in food and confectionery. If Mars starts laying downtoo many controls by merging all its businesses – and thereforealso its marketing and management strategies – it may streamlinecommunications, but could lose the creativity available indifferent regions.

Questions:

1. Discuss the two views of organizing Mars’ Europeanactivities. (300 words)

2. Did Mars Inc. do the right thing in your opinion? ??(300words)