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Mars, Incorporated

Mars, Incorporated

6885 Elm Street
McLean, Virginia 22101
U.S.A.
Telephone: (703) 821-4900
Fax: (703) 448-9678
Web site: http://www.mars.com

Private Company
Incorporated: 1911 as Mar-O-Bar Co.
Employees: 30,000
Sales: $14 billion (2000 est.)
NAIC: 31132 Chocolate and Confectionery Manufacturing from Cacao Beans; 31134 Nonchocolate Confectionery Manufacturing; 31152 Ice Cream and Frozen Dessert Manufacturing; 311111 Dog and Cat Food Manufacturing; 311212 Rice Milling; 311919 Other Snack Food Manufacturing; 311991 Perishable Prepared Food Manufacturing; 311999 All Other Miscellaneous Food Manufacturing; 333311 Automatic Vending Machine Manufacturing

From its origins in candy and confectionary products, Mars, Incorporated has diversified to become a world leader in several other markets, including snack foods, pet care products, main meal foods, electronic automated payment systems, and soft drink vending. In spite of its large size and geographic reach, the company remains privately owned. It has fostered an ostensibly egalitarian corporate culture since the 1960s. The company is notoriously secretive despite the millions it spends to promote its products. Although lagging behind rival chocolatier Hershey domestically, Mars has stronger global operations and controls 15 percent of the world candy business.

Origins in 1911

Mars began in 1911 as the Mar-O-Bar Co., a snack food business founded by Frank C. Mars of Tacoma, Washington, who made a variety of buttercream candy in his home. Quality and value were the foundations of his first candy factory, which employed 125 people. In 1920 Frank Mars relocated to larger quarters in Minneapolis, where Snickers (without the chocolate coating) and Milky Way bars were created. The company posted a loss of $6,000 in 1922, but by 1924, sales exceeded $700,000. Mars changed his companys name to Mars Candies in 1926. With the rapid growth of the company, Mars sought larger quarters and built a new plant in suburban Chicago in 1928. Sales actually quadrupled during the lean years of the Depression and new products were introduced, including the Mars Almond Bar, Snickers Bar (now sporting a chocolate covering), and 3 Musketeers.

Frank Mars hired his son Forrest E. Mars to work in the candy operation after his graduation from Yale, but the two reportedly had a stormy relationship. In the early 1930s, Frank, giving Forrest some money and the foreign rights to manufacture Milky Way, ordered his son to start his own business abroad. Moving to England, Forrest established a confectionery and a canned pet food company, which met with great success.

In 1940 Forrest Mars returned to the United States and founded M&M Limited in Newark, New Jersey, to manufacture chocolate candies in a sugar shell. At that time, stores reduced their stock of chocolate in the summer because of the lack of air conditioning, and Forrest hoped to capitalize on the unique construction of M&Ms to sell the candy year round. The name of the candy was derived from the initials of Mars and an associate, Bruce Murrie. M&Ms Peanut Chocolate Candies were introduced in 1954, the same year the famous slogan the milk chocolate melts in your mouthnot in your hand was first used.

Frank Marss business was also experiencing great success. In 1943 Mars ventured into the main meal business, which included a wide selection of rice products, including whole grain, savory, boil-in-bag, fast cook, instant, and frozen rice as well as other products. Uncle Bens rice utilized a rice processing technology called parboiling, which was developed in England and was first used in the United States by a Texas food broker with whom Forrest E. Mars, Sr., formed a partnership. Several months after their first production facility was completed, they began selling rice to the U.S. Army, which they continued to supply throughout World War II.

After the war, the company introduced converted rice to the American public, and by 1952 it sold the countrys number one brand of rice. Around this time, the company adopted the name Uncle Ben for a locally famous rice grower known for producing high quality rice crops. Uncle Bens eventually became the leading brand of rice worldwide, sold in more than 100 countries, with manufacturing facilities in the United States, Australia, Belgium, German, the Netherlands, and the United Kingdom. Other popular brands included Country Inn rice, Dolmio spaghetti sauces, pasta, and oriental dishes named Suzi Wan, primarily sold in Europe and Australia.

United in 1967

Because of increased production, Mars constructed a new plant in Hackettstown, New Jersey, in 1958. In the early 1960s, facilities were extended to Europe with a factory at Veghel in the Netherlands. In 1967 Forrest merged his business with the Mars Company owned by his father and took over operation of the new company. He established a radically egalitarian system at the company in which workers were called associates and everyonefrom the president downpunched a time clock. Offices were eliminated and desks were arranged in a wagonwheel fashion, with the higher-ranking executives in the center, to facilitate communication between individuals and functional areas. Notoriously demanding, Forrest rewarded his associates with salaries that were substantially higher than those in other comparably sized companies.

In 1968 Marsalready the largest dog food packer in the world, with subsidiaries in Europe, South America, and Australiaacquired Kal Kan Foods, Inc., a dog food company founded in 1937 that later supplied food for dogs in the U.S. military during World War II. With assistance from Mars, Kal Kan expanded by adding a second canned pet food plant in Columbus, Ohio, and a dry pet food plant in Mattoon, Illinois, while expanding into midwestern and eastern markets. New product development of Mars pet-care products was aided by the creation of the Waltham Centre for Pet Nutrition in the United Kingdom, which was formed to study the nutritional preferences and needs of pet animals. Nutritional studies were published regularly in scientific and veterinary journals, and Waltham became a world authority on pet care and nutrition.

Mars Electronics International (MEI) began operating in Britain in 1969 and expanded to the United States in 1972. MEI was responsible for the introduction of electronics to the vending machine industry. In 1985 MEI expanded its product line to include advanced bill technology and cashless payment systems. In addition to serving the vending industry, MEI also provided products for use in pay phones and amusement parks. MEIs electronics technology had also been applied to data acquisition and laser scanning devices. In 1987 the companys British and American operations were merged to form the largest international manufacturer of electronic coin machines. In addition to its two manufacturing facilities, MEI had marketing and sales offices throughout the United States, Europe, Australia, and the Far East.

Forrest, Sr., retired from Mars in 1973. His elder sons, Forrest E. Mars, Jr., and John Mars, took over Mars as co-presidentsjoined in 1983 in the office of the president by their sister Jackie, who took a lesser role in running the company. In his retirement, Forrest, Sr., started a candy business named Ethel M. Chocolates (after his late mother) to produce premium boxed chocolates. Around 1988 Ethel M. Chocolates was purchased by Mars.

Sweet Battle in the 1970s and 1980s

Despite its unorthodox corporate culture, the Mars company thrived. Hershey Foods and Mars historically fought a battle to hold the number one spot in the U.S. candy market, an honor which passed between them. Mars took over the top spot in the early 1970s and by late in the decade had pushed its market share 14 percentage points ahead of Hershey. According to an industry executive quoted in Fortune, it took the Hershey people seven or eight years to realize that Mars was not going to go away.Then it took them another five years to get their act together. Hershey responded with a flurry of new product introductions, heavy advertising, and innovative marketing efforts. In the mid-1980s Mars tried to combat this by creating a new image for candy as a sweet snack, not just junk food. Mars paid $5 million to have M&Ms and Snickers named the official snack foods of the 1984 Olympic Games. Commercials featured athletes getting quick energy from sugary snacks. By 1985 industry analysts noted that the two companies were neck and neck, with Marss recent brand introductions including Bounty Bars, Combos, Holidays M&Ms, Kudos, Starburst, Skittles, and Twix Cookie Bar.

Mars added frozen snacks to its repertoire when it acquired Dove International in 1986. The Dove Bar, a hand-dipped ice cream bar with a thick chocolate coating, was created in 1956 by Leo Stefanos, the proprietor of a Chicago candy shop. For many years, the bar was only available in the Chicago area; it appeared in selected U.S. markets during the early 1980s. Doveurope was established in 1988. Other Mars frozen treats included Dove miniatures and ice-cream versions of 3 Musketeers, Milky Way, and Snickers bars.

In 1988 Hershey Foods Corporation surpassed Mars as the largest U.S. candy maker when it acquired Cadbury Schweppess U.S. division, boasting the Mounds and Almond Joy brands. In 1989 Mars suffered another setback when it tried to launch Sussande chocolate bars, a high priced European-style bar, which, according to a report in Forbes, was a costly failure.

Company Perspectives:

Good products plus good people makes a good business was one of Forrest Mars, Sr. s guidelines for running the company he founded. It is a formula to which Mars has always adhered.

More Brands for the 1990s

The company rivalry between Mars and Hershey reversed itself in 1991, when Mars increased its percentage of the total candy market from 16.7 percent to 17.9 percent while Hersheys market share remained flat at 17 percent, according to the Wall Street Journal. Mars was very successful with its 1990 introduction of peanut butter M&Ms, which took a toll on Hersheys number two-ranked Reeses peanut butter cups. Mars launched 12 new products in 1991, including a dark chocolate candy bar under the Dove name, mint and almond M&Ms, Milky Way Dark, and Peanut Butter Snickers.

Also in 1991 Mars introduced Expert, a super-premium dog and cat food line meant as an alternative to Hills Science Diet and lams, which was sold only in pet stores and feed shops. An industry analyst noted in the New York Times that people are feeding their pets like they feed their children. The nutrition kick has moved over to our pets. To meet customer demand, Mars quickly moved into the specialty pet food area, but made the product accessible by selling it in supermarkets. Marss other petcare lines continued to do well. According to company literature, Kal Kan was the fifth largest pet food manufacturer in the United States. Other top sellers in Australia, Europe, and the United States included Pedigree and Partners dog foods; Whiskas, Sheeba, and Brekkies cat food; and Winergy Horsesnacks.

Mars also explored healthier alternatives for its traditional snack products when, in 1992, the company became the first customer of Procter & Gamble Co.s caprenin, a low-calorie cocoa butter substitute. Mars used caprenin in Milky Way II bars, launched on the West Coast in April 1992. Made of fatty acids naturally found in other fats such as peanut oil, cheese, and milk, caprenin was not subject to Food and Drug Administration approval as were fat substitutes. Some of the sugar in Milky Way II was replaced with polydextrose, a low-calorie carbohydrate. The resulting candy bar was 25 percent lower in total calories and had 50 percent fewer calories from fat than the original Milky Way. By introducing Milky Way II, Mars became the first candy manufacturer to try to gain or retain calorie- and fat-conscious customers.

The company did not ignore its strengths, however. In late 1992, Mars began testing Mahogany, a line of premium chocolates, in Germany. These candies included truffles, bars, and boxed chocolates in reddish-brown and gold packaging with such South American motifs as palm trees and colonial style houses. The candy was relatively expensive, with a small box of eight truffles costing almost $4 and a 50-gram chocolate bar selling for more than $1.

Analysts questioned Marss future stability, particularly in light of the Mars brothers reputed inability to share power with top managers who did not carry the family name, and it remained unclear who would assume control of the company when they retired. In the early 1990s, though, the company rested near the top of the confectionery products, dog and cat food, and rice milling industries. With numerous internationally recognized brands, including the perennially top-ranked Snickers, Kal Kan, and Uncle Bens, Mars enjoyed a unique recipe for success.

John and Forrest Mars, Jr., had trouble through three presidents in the first four years in the early 1990s. Demanding taskmasters, they often paid double the going rate for management talent. In the middle of 1993, as its competitors downsized, the company offered voluntary separation agreements to its U.S. employees.

Waking Up in the Mid-1990s

Market share in several categories slipped in the early 1990s; the overall European market was shrinking. Mars suffered a conspicuous lack of successful new products, an area in which archrival Hershey excelled. However, reported Fortune, the Mars brothers seemed unfazed, likely more focused on long-term concerns than momentary fluctuations in sales. Fortune questioned the effectiveness of the companys one world, one brand policy, maintaining regional differences were still an important factor in marketing. Mars, however, still beat Hersheys overseas; it was estimated to have shipped 100,000 tons of chocolate to Russia alone in 1993.

Mars dumped its ad agency, Bates Worldwide, in favor of BBDO in 1995. Mars wanted a more image-building approach such as had been successful for Visa and Pepsi. The company did hire former Bates executives to head its European marketing.

Mars tried several new tricks in the late 1990s. It acquired a small organic foods marketer, Seeds of Change, in late 1997. The reportedly foul-tasting V02 Max Energy Bar, Marss shot at a $300 million a year market, was launched but quickly pulled due to poor sales. A version of M&Ms with crisped rice added to the chocolate center was much more successful; it began shipping in late 1998.

Key Dates:

1911:
Frank C. Mars starts a candy factory in Tacoma, Washington.
1920:
Mars relocates to Minneapolis; company begins selling Snickers and Milky Way bars.
1926:
Business is renamed Mars Candies.
1928:
A new plant in Chicago is built.
1940:
After starting operations in Europe, son Forrest brings M&Ms to United States.
1943:
Mars begins making parboiled (instant) rice for the U.S. Army.
1954:
Peanut M&Ms debuts.
1958:
Mars builds a new plant in New Jersey; facilities soon extend to the Netherlands.
1967:
Frank and Forrest Mars merge their respective businesses.
1968:
Mars, already a leading dog food maker, buys and expands Kal Kan.
1969:
Mars Electronics International begins developing high-tech vending machines.
1973:
Forrest Mars retires; elder Mars children become co-presidents.
1986:
Mars enters frozen snack business with purchase of Dove International.
1991:
Numerous new candy and pet food brands are added.
1999:
Founder Frank Mars dies.
2000:
Cocoapro.com web site celebrates the magic of chocolate.

Forrest Mars, Sr., died in Miami in July 1999 at the age of 95. His children had been legally barred from selling the company without his consent until his death, leading to speculation that the company would go public or change hands within a few years. After its founders death, the company began to consolidate several divisions and agencies. It planned to merge its candy, pet care, and food businesses in continental Europe into a single unit.

Forbes believed Mars, Incorporated had already become sluggish and, being private, inattentive to the quarterly profit demands of Wall Street. Its chocolates trailed ten points behind those of its rival from Pennsylvania. The Uncle Bens division, once the leading rice producer in the United States, let market share fall to Quaker Oats Rice-A-Roni and Carolina and Mahatma rice from Riviana Foods until it actually lost money in 1998. In 1999, after terminating 100 of its 540 associates, the division found a hit in frozen dinnersmicrowaveable bowls of rice topped with meat, vegetables, and sauce.

In early 2000, Mars launched a web site, Cocoapro.com, dedicated to celebrating recent research claiming health benefits for certain of chocolates plant-derived components. The companys extensive process for manufacturing chocolate was also presented.

In spite of its market share setbacks, Mars, Incorporated was still a serious marketing force around the world. At the beginning of the millennium, the company had facilities in more than 60 countries and sold products in more than 150. It was spending $850 million a year advertising brands such as M&Ms candies, Snickers candy bars, Uncle Bens rice, and Pedigree dog food.

Principal Subsidiaries

Ceipa France; Dolma Italy; Kal Kan Foods.

Principal Divisions

Snack Foods; Pet Care; Main Meals; Electronics; Drinks.

Principal Competitors

Cadbury Schweppes; Hershey Foods Corporation; Nestlé S.A.; Ralston Purina Company.

Further Reading

Beirne, Mike,Mars Extends M&Ms Crisp-Ward; Toy Candy Surges Past Fad Status, Brandweek, June 29, 1998, p. 8.

Benady, David,Mars Acts to Halt European Decline, Marketing Week, September 6, 1996, pp. 24ff.

Brabbs, Cordelia,Unwrapping the Changing Future of Mars, Marketing, January 13, 2000, p. 13.

Branch, Shelly,Chocolate Lovers, Relax! Mars Points to Web Site Touting Cocoas Benefits, The Wall Street Journal, January 28, 2000, p. B2.

Brenner, J.G., The Emperors of Chocolate, New York: Random House, 1999.

, Planet of the M&Ms, Washington Post Magazine, April 12,1992.

Cantoni, Craig J., Quality Control from Mars, Wall Street Journal, January 27, 1992.

Dixon, Mark, Bar Wars, Accountancy, June 1998, pp. 3234.

Fairclough, Gordon, Mars Inc. s Future Is Unclear After Death of Patriarch, Wall Street Journal, July 6, 1999, p. A22.

Fisher, Christy, Milky Way Cuts Calories, Advertising Age, January 20, 1992.

Fucini, Joseph J., and Suzy Fucini, Entrepreneurs: The Men and Women Behind Famous Brand Names and How They Made It, Boston: G.K Hall & Co., 1985.

Hwang, Suein L., Peanuts and Caramel Combine to Create Sticky Competition, Wall Street Journal, April 14, 1992.

Johnson, Bradley, Kal Kan Goes Upscale, Advertising Age, September 24, 1990.

Katayama, Frederick H.,Snickers Ice Cream Bar, Fortune, August 13, 1990.

Kitt, Janette,Securing a Foothold for Confectionery, Candy Industry, July 1992.

Koselka, Rita,Candy Wars, Forbes, August 17, 1992.

Lawrence, Steve,Bar Wars: Hershey Bites Mars, Fortune, July 8, 1985.

Leonhardt, David,Its Not All Kisses in Candyland (review of The Emperors of Chocolate), Business Week, February 22, 1999, p. 18.

Levitt, Craig, Sweet Success, Discount Merchandiser, October 1997, pp. 3538.

A Little Illustrated Encyclopedia of M&M/Mars, Hackettstown, N.J.: M&M/Mars, 1992.

Mars Acquires the Dove Bar, New York Times, August 12, 1986.

Mars Merger Talks Denied by Nestlé, New York Times, September 20, 1991.

McNatt, Robert, and Roy Furchgott, Its the Taste, Stupid, Business Week, June 1, 1998, p. 6.

Mehegan, Sean, Mars Attacks, Brandweek, May 13, 1996, p. 1.

Mistry, Bhavna, On a Global Mission, Marketing, October 9, 1997, pp. 3942.

Mussey, Dagmar, and Laurel Wentz, Mars Tries Premium Chocolate in Europe, Advertising Age, December 14, 1992.

Noble, Barbara Presley, Will the American Pet Go for Haute Cuisine?, New York Times, December 16, 1990.

OLeary, Noreen, New Life on Mars, Brandweek, May 6, 1996, p. 44.

On the Wings of a Dove, Washington Post, May 13, 1991.

Our Most Important Ingredient Is Quality, McLean, Va.: Mars, Incorporated, 1980.

P&G Sells Caprenin to Mars, Achieving Products First Sale, Wall Street Journal, January 20, 1992.

Palmen, Christopher, Wake Up, Mars!, Forbes, December 13,1999.

Rutherford, Andrea C, Candy Firms Roll OutHealthy Sweets, But Snackers May Sour on the Products, Wall Street Journal, August 10, 1992.

Saporito, Bill, The Eclipse of Mars, Fortune, November 28, 1994,p. 82ff.

, Uncovering Mars Unknown Empire, Fortune, September 26, 1988.

Sprout, Alison L., Milky Way Light, Fortune, February 24, 1992.

Steinhauer, Jennifer, Americas Chocoholics: A Built-in Market for Confectioners, New York Times, July 14, 1991.

Janet Reinhart Hall
update: Frederick C. Ingram

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Mars, Inc.

Mars, Inc.

6885 Elm Street
McLean, Virginia 22101
U.S.A.
(703) 821-4900
Fax: (703) 448-9678

Private Company
Incorporated: 1911 as Mar-O-Bar Co.
Employees: 28,000
Sales: $13 billion
SICs: 2064 Candy & Other Confectionery Products; 2024 Ice Cream & Frozen Desserts; 2047 Dog & Cat Food; 2044 Rice Milling

Mars, Inc. is a diversified international company ranked in 1992 as the leading manufacturer of candy and confectionery products. Mars is known for its famous brandssuch as Snickers, Milky Way, M&Ms, Kal Kan, Whiskas, and Uncle Bens Riceas well as for its leaders preoccupation with privacy and its unconventional office structure. Mars, Inc. is controlled by the Mars family, and the secrecy surrounding the company and the family is legendary. The company maintains that Mars should be known for its brands, not the personalities of its executives; therefore, photographs and interviews with insiders are rarely permitted. The company does not publish any financial information.

Marss primary businesses are branded snack foods, accounting for approximately 43 percent of sales; pet-care products, comprising 44 percent of sales; and main meal, electronics, and drinks, accounting for the remaining 13 percent of sales. By region, about half of sales are in Europe, 40 percent in the Americas, and 10 percent in Australia, Japan, and the West Pacific. Snack foods, pet food, and main meal divisions have their origins before mid-century. The electronics and Dove International divisions represent the more recent Mars businesses.

Mars began in 1911 as the Mar-O-Bar Company, a snack food business founded by Frank C. Mars of Tacoma, Washington, who made a variety of butter cream candy in his home. Quality and value were the foundations of his first candy factory, which employed 125 people. In 1920-Frank Mars relocated to larger quarters in Minneapolis, where Snickers (without the chocolate coating) and Milky Way bars were created. The company posted a loss of $6,000 in 1922, but by 1924, sales exceeded $700,000. Mars changed his companys name to Mars Candies in 1926. With the rapid growth of the company, Mars sought larger quarters and built a new plant in suburban Chicago in 1928. Sales actually quadrupled during the lean years of the Depression and new products were introduced, including Mars Almond Bar, Snickers Bar (now sporting a chocolate covering), and 3 Musketeers.

Frank Mars hired his son Forrest E. Mars to work in the candy operation after his graduation from Yale, but the two reportedly had a stormy relationship. In the early 1930s, Frank, giving Forrest some money and the foreign rights to manufacturer Milky Way, ordered his son to start his own business abroad. Moving to England, Forrest established a confectionery and a canned pet food company, which met with great success.

In 1940 Forrest Mars returned to the United States and founded M&M Limited in Newark, New Jersey, to manufacture chocolate candies in a sugar shell. At that time, stores reduced their stock of chocolate in the summer because of the lack of air conditioning, and Forrest hoped to capitalize on the unique construction of M&Ms to sell the candy year round. The name of the candy was derived from the initials of Mars and an associate, Bruce Murrie. M&Ms Peanut Chocolate Candies were introduced in 1954, the same year the famous slogan the milk chocolate melts in your mouthnot in your hand was first used.

Frank Marss business was also experiencing great success. In 1943 Mars ventured into the main meal business, which includes a wide selection of rice products, including whole grain, savory, boil-in-bag, fast cook, instant, and frozen rice as well as other products. Uncle Bens rice utilizes a rice processing technology called parboiling, which was developed in England and was first used in the United States by a Texas food broker with whom Forest E. Mars, Sr., formed a partnership. Several months after their first production facility was completed, they began selling rice to the U.S. Army, which they continued to supply throughout World War II.

After the war, the company introduced converted rice to the American public, and by 1952 it sold the countrys number one brand of rice. Around this time, the company adopted the name Uncle Ben for a locally famous rice grower known for producing high quality rice crops. Uncle Bens is now the leading brand of rice worldwide, sold in more than 100 countries, with manufacturing facilities in the United States, Australia, Belgium, German, the Netherlands, and the United Kingdom. Other popular brands include Country Inn rice, Dolmio spaghetti sauces, pasta, and oriental dishes named Suzi Wan, primarily sold in Europe and Australia.

Because of increased production, Mars constructed a new plant in Hackettstown, New Jersey, in 1958. In the early 1960s, facilities were extended to Europe with a factory at Veghel in the Netherlands. In 1967 Forrest merged his business with the Mars Company owned by his father and took over operation of the new company. He established a radically egalitarian system at the company in which workers were called associates and everyonefrom the president downpunched a time clock. Offices were eliminated and desks were arranged in a wagon-wheel fashion, with the higher ranking executives in the center, to facilitate communication between individuals and functional areas. Notoriously demanding, Forrest rewarded his associates with salaries that were substantially higher than those in other comparably-sized companies.

In 1968 Marsalready the largest dog food packer in the world, with subsidiaries in Europe, South America, and Australiaacquired Kal Kan Foods, Inc., a dog food company founded in 1937 that later supplied food for dogs in the U.S. military during World War II. With assistance from Mars, Kal Kan expanded by adding a second canned pet food plant in Columbus, Ohio, and a dry pet food plant in Mattoon, Illinois, while expanding into mid western and eastern markets. New product development of Mars pet-care products has been aided by the creation of the Waltham Centre for Pet Nutrition in the United Kingdom, which was formed to study the nutritional preferences and needs of pet animals. Nutritional studies are published regularly in scientific and veterinary journals, and Waltham has become a world authority on pet care and nutrition.

Mars Electronics International (MEI) began operating in Britain in 1969 and expanded to the United States in 1972. MEI was responsible for the introduction of electronics to the vending machine industry, and today has millions of coin mechanisms installed worldwide. In 1985 MEI expanded its product line to include advanced bill technology and cashless payment systems. In addition to serving the vending industry, MEI also provides products for use in pay phones and amusement parks. MEFs electronics technology has also been applied to data acquisition and laser scanning devices. In 1987 the companys British and American operations were merged to form the largest international manufacturer of electronic coin machines. In addition to its two manufacturing facilities, MEI has marketing and sales offices throughout the United States, Europe, Australia, and the Far East.

Forrest, Sr., retired from Mars in 1973. His elder sons, Forrest E. Mars, Jr., and John Mars, took over Mars as co-presidentsjoined in 1983 in the Office of the President by their sister Jackie, who takes a lesser role in running the company. In his retirement, Forrest, Sr., started a candy business named Ethel M. Chocolates (after his late mother) to produce premium boxed chocolates. Around 1988 Ethel M. Chocolates was purchased by Mars.

Despite its unorthodox corporate culture, the Mars company has thrived. Hershey Foods Corp. and Mars, Inc. have historically fought a battle to hold the number one spot in the U.S. candy market, an honor which passes between them. Mars took over the top spot in the early 1970s and by late in the decade had pushed its market share 14 percentage points ahead of Hershey. According to an industry executive quoted in Fortune, it took the Hershey people seven or eight years to realize that Mars was not going to go away.... Then it took them another five years to get their act together. Hershey responded with a flurry of new product introductions, heavy advertising, and innovative marketing efforts. In the mid-1980s Mars tried to combat this by creating a new image for candy as a sweet snack, not just junk food. Mars paid $5 million to have M&Ms and Snickers named the official snack foods of the 1984 Olympic Games. Commercials featured athletes getting quick energy from sugary snacks. By 1985 industry analysts noted that the two companies were neck and neck, with Marss recent brands including Bounty Bars, Combos, Holidays M&Ms, Kudos, Starburst, Skittles, and Twix Cookie Bar.

Mars added frozen snacks to its repertoire when it acquired Dove International in 1986. The Dove Bar, a hand-dipped ice cream bar with a thick chocolate coating, was created in 1956 by Leo Stefanos, the proprietor of a Chicago candy shop. For many years, the bar was only available in the Chicago area, and it became a gourmet treat when it appeared in selected U.S. markets during the early 1980s. Doveurope was established in 1988. Other Mars frozen treats include Dove miniatures and ice-cream versions of 3 Musketeers, Milky Way, and Snickers bars.

In 1988 Hershey Foods Corp. surpassed Mars as the largest U.S. candy maker when it acquired Cadbury Schweppess U.S. division, boasting the Mounds and Almond Joy brands. In 1989 Mars received another setback when it tried to launch Sussande chocolate bars, a high priced European-style bar, which, according to a report in Forbes, was a costly failure.

The company rivalry between Mars and Hershey reversed itself in 1991, when Mars increased its percentage of the total candy market from 16.7 percent to 17.9 percent while Hersheys market share remained flat at 17 percent, according to the Wall Street Journal Mars was very successful with its 1990 introduction of peanut butter M&Ms, which took a toll on Hersheys number two-ranked Reeses peanut butter cups. Mars launched 12 new products in 1991, including a dark chocolate candy bar under the Dove name, mint and almond M&Ms, Milky Way Dark, and Peanut Butter Snickers.

Also in 1991 Mars introduced Expert, a superpremium dog and cat food line meant as an alternative to Hills Science Diet and lams, which are sold only in pet stores and feed shops. An industry analyst noted in the New York Times that people are feeding their pets like they feed their children. The nutrition kick has moved over to our pets. To meet customer demand, Mars quickly moved into the specialty pet food area, but made the product accessible by selling it in supermarkets. Marss other pet-care lines continued to do well. According to company literature, Kal Kan is the fifth largest pet food manufacturer in the United States. Other top sellers in Australia, Europe, and the United States include Pedigree and Partners dog foods; Whiskas, Sheeba, and Brekkies cat food; and Winergy Horsesnacks.

Mars also explored healthier alternatives for its traditional snack products when, in 1992, the company became the first customer of Proctor and Gamble Co.s caprenin, a low-calorie cocoa butter substitute. Mars used caprenin in Milky Way II bars, launched on the West Coast in April 1992. Made of fatty acids naturally found in other fats such as peanut oil, cheese, and milk, caprenin is not subject to Food and Drug Administration approval as fat substitutes are. Some of the sugar in Milky Way II is replaced with polydextrose, a low-calorie carbohydrate. The resulting candy bar is 25 percent lower in total calories and has 50 percent fewer calories from fat than the original Milky Way. By introducing Milky Way II, Mars became the first candy manufacturer to try to gain or retain calorie- and fat-conscious customers.

The company did not ignore its strengths, however. In late 1992, Mars began testing Mahogany, a line of premium chocolates, in Germany. These candies include truffles, bars, and boxed chocolates in reddish-brown and gold packaging with such South American motifs as palm trees and colonial style houses. The candy is relatively expensive, with a small box of eight truffles costing almost $4 and a 50-gram chocolate bar selling for more than $1.

Analysts have questioned Marss future stability, particularly in light of the Mars brothers reputed inability to share power with top managers who do not carry the family name, and it is unclear who will assume control of the company when they retire. For now, though, the company continues to rest near the top of the confectionery products, dog and cat food, and rice milling industries. With numerous internationally recognized brands, including the perennially top-ranked Snickers, Kal Kan, and Uncle Bens, Mars is enjoying its unique recipe for success.

Further Reading

Our Most Important Ingredient is Quality, McLean, VA: Mars, Inc., 1980; Fucini, Joseph J. and Fucini Suzy, Entrepreneurs: The Men and Women behind Famous Brand Names and How They Made It, Boston: G.K Hall & Co., 1985; Lawrence, Steve, Bar Wars: Hershey Bites Mars, Fortune, July 8, 1985; Mars Acquires the Dove Bar, New York Times, August 12, 1986; Saporito, Bill, Uncovering Mars Unknown Empire, Fortune, September 26, 1988; Katayama, Frederick H., Snickers Ice Cream Bar, Fortune, August 13, 1990; Johnson, Bradley, Kal Kan Goes Upscale, Advertising Age, September 24, 1990; Noble, Barbara Presley, Will the American Pet Go for Haute Cuisine?, New York Times, December 16, 1990; On the Wings of a Dove, Washington Post, May 13, 1991; Steinhauer, Jennifer, Americas Chocoholics: A Built-in Market for Confectioners, New York Times, July 14, 1991; Mars Merger Talks Denied by Nestle, New York Times, September 20, 1991; A Little Illustrated Encyclopedia of M&M/Mars, Hackettstown, NJ, M&M/Mars, 1992; P&G Sells Caprenin to Mars, Achieving Products First Sale, Wall Street Journal, January 20, 1992; Fisher, Christy, Milky Way Cuts Calories, Advertising Age, January 20, 1992; Cantoni, Craig J., Quality Control from Mars, Wall Street Journal, January 27, 1992; Sprout, Alison L, Milky Way Light, Fortune, February 24, 1992; Brenner, Joel Glenn, Planet of the M&Ms, Washington Post Magazine, April 12, 1992; Hwang, Suein L., Peanuts and Caramel Combine to Create Sticky Competition, Wall Street Journal, April 14, 1992; Kitt, Janette, Securing a Foothold for Confectionery, Candy Industry, July, 1992; Rutherford, Andrea C., Candy Firms Roll Out Healthy Sweets, but Snackers May Sour on the Products, Wall Street Journal, August 10, 1992; Koselka, Rita, Candy Wars, Forbes, August 17, 1992; Mussey, Dagmar, and Laurel Wentz, Mars Tries Premium Chocolate in Europe, Advertising Age, December 14, 1992.

Janet Reinhart Hall

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Mars, Inc.

Mars, Inc.

founded: 1911



Contact Information:

headquarters: 6885 elm st. mclean, va 22101-3810 phone: (703)821-4900 fax: (703)448-9678

OVERVIEW

Mars Inc. is a diversified company and one of the world's largest producers of confectionery products and pet foods. Controlled by the Mars family, the secrecy surrounding the Mars family is legendary. According to Fortune magazine, Mars believes strongly in the marketing philosophy of "one world, one brand, one message." The theory is that because we live in an increasingly homogeneous world, many products may be sold using the same marketing techniques everywhere. The Mars family, although billionaires, live modestly and operate a no-frills company.



COMPANY FINANCES

As a privately held company, Mars is not obligated to disclose the full details of its financial operations. It is estimated, however, that the company's revenue in 1997 totaled $15.0 billion, up 15.4 percent from revenue of $13.0 billion recorded in 1996. In 1995 the company's revenue was estimated at $13.0 billion, up about 4 percent from $12.5 billion in 1994.



HISTORY

Mars began in 1911 as the Mar-O-Bar Company, a snack food company founded by Frank C. Mars of Tacoma, Washington. What started as a home venture, making a variety of butter cream candy, grew to a small candy factory employing 125 people. In 1920, Frank Mars relocated to larger quarters in Minneapolis where the Snickers and Milky Way brands were created. Even though the company posted a loss of $6,000 in 1922, by 1924 sales exceeded $700,000. Mars changed the company name to Mars Candies in 1926, found itself in need of larger quarters, and built a new plant in suburban Chicago in 1928. During the depression sales actually quadrupled. Mars Almond Bar, Snickers Bar, and 3 Musketeers were also introduced.

Frank Mars hired his son Forrest E. Mars after his graduation from Yale. The father-son relationship, however, proved stormy. Frank eventually gave Forrest some money and the foreign rights to the Milky Way brand candy and sent him on his way. Forrest moved to England where he established a confectionery and a canned pet food company, both of which proved very successful. In 1940 Forrest returned to the United States and founded M&M Ltd. in Newark, New Jersey. M&M's peanut chocolate candies were introduced in 1954.

Meanwhile Frank Mars' business was also doing very well. Venturing into the main meal business in 1943, Mars had added a wide selection of rice products as well as other products to its product lines. Mars began selling rice to the U.S. Army during World War II. After the war the company introduced converted rice to the American public. By 1952 they were selling the country's number one brand of rice and the name "Uncle Ben" was adopted after a locally famous rice grower known for producing high quality crops. In 1958 a new plant was constructed in Hackettstown, New Jersey, and in the 1960s facilities were extended to Europe.

In 1967 Forrest merged his business with the Mars Company owned by his father and took over operation of the new company. The management style adopted by Forrest Mars was considered radical egalitarian, where the workers were called associates and everyone from the president down had to punch a time clock. Offices were eliminated and desks were arranged in a wagon-wheel fashion with the executives seated in the center of the wheel.

In 1968 Mars acquired Kal-Kan Foods, making the already largest dog food packer in the world even larger. Mars Electronics International, responsible for the introduction of electronics to the vending machine industry, began operating in Britain in 1969 and expanded to the United States in 1972. In 1973 Forrest Sr. retired from Mars, leaving his two older sons, Forrest E. Mars Jr. and John Mars, to take over as co-presidents. In 1983 Forrest Jr. and John were joined by their sister Jackie, who took a lesser role in running the company.

The mid-1990s have seen a number of new product rollouts at Mars, as the company continues its war with Hershey for supremacy in the American candy market. Among the products introduced in the mid-1990s were a miniature version of 3 Musketeers in 1995 and mini-M&Ms in 1996. Also launched during this period was Colorworks, a system that permits M&M buyers to customize the color assortment in their orders.




STRATEGY

Mars Inc. has what is considered a highly unorthodox corporate culture. Despite this, the company has thrived. The ongoing duel for the top spot between Hershey and Mars has continued through the years. Hershey, trying to fight for the number one spot that was taken by Mars in the 1970s, introduced a wide range of new products and tried innovative marketing efforts and heavy advertising. Mars, fighting back in the mid-1980s, paid $5 million to have M&Ms and Snickers named as the official snack foods of the 1984 Olympics. Mars was trying to create the image of candy as a sweet snack, not just junk food. By 1985 industry analysts considered the two companies to be neck and neck.

FAST FACTS: About Mars, Inc.


Ownership: Mars Inc. is a privately owned company.

Officers: Forrest E. Mars Jr., Co-Pres. & CEO; John F. Mars, Co-Pres.; V.J. Spitaleri, VP & Treasurer

Employees: 28,500

Principal Subsidiary Companies: Mars Inc.'s subsidiaries include Dove International Inc., Kal Kan Foods Inc., M&M/Mars, Mars Electronics International, and Uncle Ben's Inc.

Chief Competitors: Involved in the production and marketing of candy and other confections, pet foods, snack foods, and rice products, Mars faces competition in all its product areas. Among its principal competitors are: Ben & Jerry's; Borden; Cadbury Schweppes; Campbell Soup; Colgate-Palmolive; ConAgra; General Mills; Heinz; Hershey; Nestle; Philip Morris; Ralston Purina; and Unilever.




In 1986 Mars acquired Dove International and added frozen snacks to its repertoire. Toward the end of the decade all the other major Mars brand names—Snickers, 3 Musketeers, and Milky Way—were made available as frozen treats. In 1988 Hershey surpassed Mars as the largest U.S. candy maker with its acquisition of the U.S. division of Cadbury Schweppes. Mars had another setback when it tried to launch a high priced European style bar in 1989.

In 1991, rankings in the U.S. candy wars changed again, with Mars coming out on top with its percentage of the total candy market increasing from 16.7 to 17.9 percent. Further supporting Mars's position were successful product introductions that year, including peanut butter M&Ms, a dark chocolate bar under the Dove name, mint and almond M&Ms, Milky Way Dark, and Peanut Butter Snickers. In 1991 Mars moved into the specialty pet foods area with its introduction of Expert.




INFLUENCES

In 1992 Mars became the first candy maker to try to gain or retain calorie-counting and fat-conscious customers by introducing Procter and Gamble's "caprenin," a low-calorie cocoa butter substitute, in its products. Mars had a difficult time keeping its reduced-calorie candy on grocery shelves, and sales of the "lite" candy bars helped to boost the overall profit of the company. In 1995 Mars' campaign to promote its new blue M&Ms with animated M&M characters resulted in double-digit growth for the company.

In another attempt to meet the needs of those consumers who were turning away from chocolate to reduce their fat intake, Mars introduced Starburst Fruit Twists and Starburst Jellybeans in 1996.




CURRENT TRENDS

To feed the seemingly insatiable American (and world) appetite for chocolate candy, Mars was expected to introduce still another variation of its very successful M&M candy brand late in 1998. George Lazarus, writing in the Chicago Tribune in May 1998, said insiders were reporting that a new, crispier M&M formulation would likely appear on store shelves before the end of the year. According to Lazarus, one source likened the texture of the new crispy-style M&M to that of a Nestle Crunch bar.

CHRONOLOGY: Key Dates for Mars, Inc.


1911:

Founded as the Mar-O-Bar Company

1920:

Company moves from a home operation into a larger plant in Minneapolis

1923:

Introduces the Milky Way candy bar

1924:

Sales exceed $700,000

1926:

Company name changes to Mars Candies

1928:

Builds a larger plant in Chicago

1940:

Frank Mar's son, Forrest, founded M&M Ltd.

1943:

Mars adds a rice product line

1952:

Uncle Ben name is given to the line of rice products

1954:

Introduces M&Ms peanut chocolate candies

1958:

Constructs a new plant in Hackettstown, New Jersey

1967:

M&M Ltd. merges with Mars Candies

1968:

Acquires Kal-Kan Foods

1969:

Mars Electronics International begins operating in Britain

1972:

Mars Electronics International begins operating in the United States

1973:

Forrest Mars, Sr. retires and Forrest Mars, Jr. and John Mars become co-presidents

1983:

Jackie Mars, Forrest Mars, Sr.'s daughter, joins the company with her brothers

1984:

Becomes official snack foods of the 1984 Olympics

1986:

Acquires Dove International

1988:

Acquires Ethel M Chocolates

1989:

Introduces Bounty Bars

1991:

Introduces Expert pet food

1992:

Introduces caprenin in its products

1995:

Miniature 3 Musketeers are introduced; the M&M guys advertising campaign begins

1996:

Introduces Mini M&Ms, Starburst Fruit Twists, and Starburst Jellybeans

1997:

Opens a $200 million production facility outside of Moscow

PRODUCTS

Major players in the Mars candy product line are M&Ms, Mars, Milky Way, Snickers, Dove, 3 Musketeers, Skittles, and Starburst. Frozen confections sold by Mars include Dove Bars, Milky Way, Snickers, and 3 Musketeers. The company's pet food product lines include Kal Kan, Pedigree, Sheba, and Whiskas. Uncle Ben's Inc., a wholly owned subsidiary of Mars, markets a variety of rice products, including Uncle Ben's Converted Rice, Uncle Ben's Long Grain & Wild Rice, and Uncle Ben's boil-in-bag rice. The company's snack product line includes Combos, Kudos, and Twix.



GLOBAL PRESENCE

From early on in its history Mars has had a decidedly international flair, since much of Forrest Mars Sr.'s business expertise in the confectionery and other markets was acquired during his lengthy "exile" in the United Kingdom. This interest in foreign markets continues even today. In 1989 the company entered the vast market of the Indian subcontinent when it opened a $10-million factory in India. In the latter half of the 1990s Mars opened a candy plant in Brazil.

Mars began selling its Mars and Snickers bars in what was then the Soviet Union in 1991. Snickers quickly captured the top sales spot in the Russian confectionery market, a market worth $2.5 to $3.0 billion annually. In May 1997 Mars opened a $200-million production facility just outside of Moscow. At the time, it was the single largest foreign investment in a production facility inside Russia. The company also plans to build a pet food production facility near the Siberian city of Novosibirsk.

M&M MANIA

M&M's, the candies that "melt in your mouth, not in your hands," are America's top candy—a candy with quite a history. The little shell-covered chocolates got their start during WWII, when American troops carried them around in small tubes. The colorful M&M's brightened our boys' spirits and helped give them energy.

Back then American GI's could chew on purple M&M's. Today, the typical package contains blue, green, brown, yellow, orange, and red. As late as 1995 you could find tan M&M's in a package. That year, Mars held a public vote, and Americans voted in blue and kicked out tan. To this day, though, there is a vocal minority who call the election a hoax and who maintain that Blue murdered Tan. (For details, check out the "Anti-Blue M&M" home page on the web.) Mars vehemently denies the allegations.

M&M's are the official candy of Air Force One—the President's airplane has carried them exclusively since 1988. Hershey Foods Corp., maker of Reese's Pieces, publicly maintains an uninterested posture, but one suspects that officials at the company privately accuse the President of political candy favoritism.

The rock band Van Halen was rather particular about its M&M's—members refused to perform a concert if they found any brown ones mixed in with the rest. At a concert in 1980, after discovering that the browns hadn't been removed, the band members trashed the stage and dressing room. What exactly they had against the brown ones, no one knows for sure.

Green M&M's are rumored to be an aphrodisiac, but Mars won't confirm (or deny) such properties. The red ones, the favorite M&M of most Americans, were discontinued for awhile when some studies showed that Red Dye No. 2 caused cancer in rats. Although M&M's did not contain that specific dye, Mars did not want to create any public confusion and so pulled the red ones. But the public demanded red back and Mars, ever attentive to the will of the people, eventually reinstated America's favorite M.

In 1998 M&M's cleverly declared itself the "Official Candy of the New Millennium" (MM is the Roman numeral for 2000) in commercials. Mars sponsored an "Official Things of the New Millennium" contest. Categories included "Official Belly Button of the New Millennium" and "Official Potato that Looks like a President of the New Millennium." People were able to enter their choices on the Internet at the "M&M Center for Millennium Hype".

And so, as the year 2000 approaches, many grow anxious about an uncertain future. But rest assured, we can always take solace and comfort in good ol' M&M's, the "official candy that will assure you of continuity in the new millennium."



EMPLOYMENT

Mars Inc. is well known for its unusual corporate culture. According to an article in Fortune magazine, the Mars brothers rule the company with an iron hand. "Senior managers are scared of the Mars boys. They are like the Russian czars, dictatorial in spirit and manner." Money is one of the biggest reasons anyone would want to work for the Mars brothers. According to Fortune, "Mars manages to attract high-level talent by paying salaries often twice what competing packaged goods companies have to offer."

SOURCES OF INFORMATION

Bibliography

caryl, christian. "we will bury you . . . with a snickers bar." u.s. news & world report, 26 january 1998.

general business file. ann arbor, mi: university of michigan, 1997.

hall, janet reinhart. international directory of company histories, vol 7. detroit, mi: st. james press.

"largest private employers in the washington area." washington post, 22 april 1996.

lazarus, george. "m&ms' maker gives old favorite a new crunch." chicago tribune, 8 may 1998.

manufacturing usa. detroit, mi: gale research, 1996.

"mars inc." hoover's online. 17 may 1998. available at http://www.hoovers.com/premium/profiles/40297.html.

saporito, bill. "the eclipse of mars." fortune, 28 november 1994.



For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. mars inc.'s primary sics are:

2024 ice cream and frozen deserts

2044 rice milling

2047 dog and cat food

2064 candy and other confectionery products

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Mars, Inc.

Mars, Inc.

THE ENERGY YOU CRAVE CAMPAIGN
INNER BEAST CAMPAIGN
M&M'S NEW MILLENNIUM CAMPAIGNS
SNICKERS CRUNCHER CAMPAIGN

6885 Elm Street
McLean, Virginia 22101
USA
Telephone: (703) 821-4900
Fax: (703) 448-9678
Web site: www.mars.com

THE ENERGY YOU CRAVE CAMPAIGN

OVERVIEW

In October 2003 renowned candy company Mars, Inc.'s newly created food division, Masterfoods USA, began a teaser campaign to let consumers know that a new energy bar was coming their way. Snickers Marathon bars, which came in two flavors, Multi-Grain Crunch and Chewy Chocolate Peanut, hit store shelves in January 2004. The new product was designed to appeal to the loyal candy-bar customer who already used the Snickers bar to satisfy hunger but wanted a healthier, protein-based energy bar more suited to their daily workout needs. The bars were aimed at taking some of the estimated $1 billion market away from industry leaders PowerBar and Balance Bar as well as an abundance of other nutrition-bar makers.

Advertising agency BBDO New York was responsible for generating high consumer awareness of the product in a short time. In fall 2003 print ads were placed in health and fitness magazines to pave the way for a comprehensive media campaign called "The Energy You Crave," which would coincide with the Marathon bars' retail appearance in January 2004. The budget for the campaign was estimated at $10 to $20 million. Television spots took up some 75 percent of ad dollars, with the rest split between print, outdoor, and online advertising as well as public relations, point-of-purchase displays, and promotional functions. The television spot that kicked off the campaign showed athletes at their limit, engaging in activities such as running and weight lifting. "Agony, anguish," said a female voice. A male voice took over, saying, "Despair. Pain. Words that should never define the taste of your energy bar." The spot was capped off by the campaign's tagline, "The Energy You Crave."

Mars, pleased with the performance of the campaign and product sales in the first months of 2004, introduced two more Snickers Marathon varieties at the end of that year. As 2004 came to an end, Snickers Marathon was among the top five fastest-selling energy bars in all stores. BBDO won a Silver EFFIE (a prestigious advertising-effectiveness award) for the campaign in 2005.

HISTORICAL CONTEXT

Since its introduction in 1930 the Snickers candy bar had been a key building block in the Mars, Inc., confection empire begun by Frank Mars in the early twentieth century. Along with the M&M's candies brand, Snickers bars became a staple of American snacking life, making the McLean, Virginia-based Mars the second-largest candy maker in the United States by the year 2000. Unlike its colorful little round cousins, however, Snickers developed a following not only for its reputation as a sweet treat but also as a hunger tamer. This meal-like quality was emphasized by Mars advertising, which consistently referred to the protein-supplying peanuts in the bar. Ads shored up the concept with the longtime slogan "Snickers really satisfies" and later with "Hungry? Why wait."

Energy bars started appearing in the 1970s but did not hit their stride until two decades later. Formerly a small niche product found in health-oriented outlets, energy or nutrition bars made up one of the fastest-growing food-product segments in 2003, with sales estimated at more than $1 billion. The bars' expansion into the mainstream market had not gone unnoticed by Mars, which had consolidated its food brands in 2002 under one division, Masterfoods USA, located in Hackettstown, New Jersey. The Mars mission had always included strengthening core brands. Drawing upon the long history of Snickers to create its own version of a protein bar, the company was looking for a way to break into a market not traditionally associated with a candy brand. According to Masterfoods spokesman Jeffrey Moran, Mars had been working on a Snickers-based energy bar for years before introducing the Snickers Marathon line in January 2004. He explained to Drug Store News, "We saw people using the Snickers candy bar for protein because of the peanuts. We wanted to take the taste of Snickers and grow it into a new and different category instead of trying to make candy healthy." The bars featured a protein-heavy blend (trademarked QUADRATEIN) of soy, peanut, casein, and whey, which was combined with carbohydrates and other nutrients.

TARGET MARKET

The first Snickers Marathon bars, made available early in 2004, were aimed primarily at men in the 18-to-45 age range who were committed to physical fitness, working out during the week and possibly engaging in some amateur competition on the weekends. The ideal customer might be a fan of Snickers candy who was looking for a healthy alternative that would taste better than standard chalky nutrition bars. Mars was also looking to woo new customers, male and female, to the nutrition-bar market: people who had once thought that energy bars were only for professional athletes but were starting to consider them a mainstream snack-food choice.

The two original flavors, Multi-Grain Crunch and Chewy Chocolate Peanut, were aimed at men first but essentially at any active adult. In fall 2004 two subsequent bar recipes followed that had a different consumer target. The Snickers Marathon Protein Performance Bar was designed to attract the more focused athlete, while the Snickers Marathon Low Carb Lifestyle Energy Bar was offered with women in mind.

COMPETITION

Traditional leaders in the energy-bar category were PowerBar, owned by venerable Mars competitor Nestlé, and Balance Bar, owned by megacorporation Kraft Foods. PowerBar was reporting more than $100 million in annual sales when Nestlé, then the world's largest food and beverage company, acquired the Berkeley, California, company in 2000. Nestlé CEO Peter Brabeck was keen to use the brand as a major component in his plan to remake Nestlé into the world's leading health and wellness company. In the wake of a glut of new competition PowerBar held its own but did not experience the growth that Nestlé had expected. Still, Power-Bar's reputation of being an originator in the category made it a major competitor against Mars' own product. Another challenge for Mars was Balance Bar. Balance Bars, designed on the popular nutritional philosophy of 40 percent carbohydrates, 30 percent protein, and 30 percent fat (40/30/30), came on the scene in 1992 and enjoyed success into the next decade.

ANGLING FOR SNICKERS MARATHON FANS

In February 2004 FLW Outdoors, the world's leading competitive-fishing organization, announced that Snickers Marathon bars would sponsor its upcoming fishing tournament season. The Mars brands Snickers and M&M's had been sponsors of the annual competitions since 2001. Confident of a loyal consumer mentality among the nation's more than 52 million anglers and their families, Mars had already used the venues for two other Snickers brand-extension launches, Snickers Crunch in 2001 and Snickers Almond Bar in 2003.

At the same time that Mars introduced its Snickers Marathon bars, another longtime rival, the candy company Hershey, unveiled its own entrant into the nutrition-bar segment. Hershey's SmartZone bar was based on the elements of the hugely popular, protein-centered Zone Diet that was created by biochemist Barry Sears and introduced to the public in 1995. Hershey, like Mars, was hoping that its association with candy would be an asset, creating customer expectations that it would taste good. The SmartZone bars promised a healthier controlled release of sugar (low glycemic index), which would also keep eaters satisfied longer. The idea of satiety was treading directly on Snickers' long-held territory, and low glycemic index was also a foundation for the new Snickers Marathon bars. The list of competition was formidable and diverse. When introduced later in 2004 the Marathon Low Carb Lifestyle Energy Bar would face off against Atkins Diet Advantage bars, which reported sales of $63.8 million in 2003, and Cliff Luna bars for women, which took in $42.4 million that same year.

MARKETING STRATEGY

Advertising agency BBDO New York was charged with the task of convincing discerning, health-conscious consumers that Snickers Marathon was a nutritiously credible energy bar with the great taste of a candy bar. The campaign the agency created, "The Energy You Crave," began in fall 2003 with teaser print ads in health and fitness magazines. The ads emphasized the nutritional aspects of the coming Marathon bars while laying the groundwork for the mass-media assault that would follow in January 2004. A budget of $10 to $20 million was allotted to cover television, print, outdoor, and online advertisements. The bulk of the advertising money, about 75 percent, was spent on the TV aspect of the campaign, with a 30-second spot debuting on January 3 during the NFL Wild Card game. In the commercial athletes were shown running extreme distances, climbing dangerously high, surfing, and pumping iron with weights that had "torture" written on them. A female voice-over intoned, "Agony, anguish." A male voice-over continued, "Despair. Pain. Words that should never define the taste of your energy bar." The tagline that followed stated, "The Energy You Crave."

At about the same time that the first TV spot ran, print ads began appearing in general-interest magazines as well as in health and fitness publications. Billboard ads were placed in the top 10 energy-bar markets, regions that made up approximately 10 percent of the country's population. The campaign included an emphasis on public relations, point-of-purchase displays, and online banners placed on health-oriented websites. The multi-pronged media approach was necessary to achieve the much-needed name recognition that was so vital to a new product entering a well-established market segment. Ads and promotions relied on the Snickers name for that purpose. Speaking with the Atlanta Journal-Constitution, Scott Krugman, vice president of public relations for the National Retail Federation, the world's largest retail trade association, described this as a distinct advantage over other new category entrants. "They're bringing something to the market that a lot of other products don't have—a recognizable name that will get people to pick it up in the first place." The Snickers name could also have been a liability, however, if the advertisements had not sufficiently communicated that Snickers Marathon was a true energy bar and not just a candy-bar pretender.

The first goal of the advertising strategy was to create product awareness, but the second part, to get consumers to buy them once and then again, was even more vital. The universal criticism of products in this food category had always been the taste and flavor experience. Consumers often settled for the lesser of two taste evils when choosing a nutritional bar, thinking that if it served one's nutritional requirements, it probably could not taste good as well. Mars felt that it could win repeat business on the taste factor. Jeffery Moran explained the company's thinking in a 2004 issue of Convenience Store News. "We've seen continued focus on everyday energy, and Snickers has always had an underlying focus on endurance and sustainability." Moran continued, "The taste of Snickers has always been our point of differentiation, and we can bring our history and background of how to make things taste good into the energy bar category." The tagline carried on all advertising, "The Energy You Crave," perfectly conveyed that the bars were so tasty and energy-packed that consumers would actually look forward to eating them.

OUTCOME

In its first year Snickers Marathon lived up to the Mars company's consumer-awareness goals and sales expectations. According to Ipsos-ASI, an advertising-research firm, the Snickers Marathon TV spots scored a Copy Effectiveness Index of 232, well above the category norm of 70 to 130, which meant that viewers understood the message of the advertising copy "The Energy You Crave." Surveys by Ipsos-ASI also revealed promising results, reporting a 50 percent "intent to purchase" level, which was more than double the typical 22 percent. Near the end of 2004, approximately 11 months after it was introduced to consumers, Snickers Marathon was among the top five fastest-selling energy bars in every outlet. Even more encouraging for Mars, Snickers Marathon was number one in the convenience store category when compared to its two major competitors, PowerBar and Balance Gold 5, a popular Balance Bar product.

BBDO New York also picked up accolades within the advertising industry, winning a Silver EFFIE Award (Snacks/Desserts/Confections category) in 2005 for its "The Energy You Crave" campaign. That year the agency also won three Gold EFFIEs for other campaigns, prompting BBDO New York's president and CEO, John Osborn, to proclaim in a company press release, "This is like hitting a Grand Slam." Mars' Masterfoods USA division responded to the success of the first two Snickers Marathon flavors by introducing more bar variations. By the end of 2005 there were eight Snickers Marathon bars to choose from that were in three nutrition categories: energy, protein, and low carbohydrate.

FURTHER READING

"The A-List." Progressive Grocer, September 1, 2004, p. 35.

Anderson, Mae. "Flipping for Snickers." Adweek, August 9, 2004, p. 20.

Beirne, Mike. "Confectioners Unwrap Low-Carb Strategies." Brandweek, June 14, 2004, p. 14.

Brenner, Joel Glenn. The Chocolate Emperors: Inside the Secret World of Hershey and Mars. New York: Random House, 1999.

Brown, Sandy. "Hotlines." Adweek, January 5, 2004, p. 4.

Cole, Leslie. "Bars as Big Business." Portland Oregonian, January 27, 2004, p. FD01.

Eckstein, Sandra. "Snickers Serves Up Energy Bar." Atlanta Journal-Constitution, May 13, 2004, p. 7NW.

Embrey, Alison. "The Energy Train." Convenience Store News, July 12, 2004

Kirsche, Michelle. "Better-for-You Bars from Candy Makers Bring Flavor, Variety to Nutrition Aisle." Drug Store News, October 11, 2004, p. 39.

Squires, Sally. "Belly Up to the Bars." Washington Post, July 27, 2004, p. F01.

Thompson, Stephanie. "Nestle Makes Nutrition Its No. 1 Priority in U.S." Advertising Age, March 21, 2005, p. 3.

―――――――. "Snickers Marathon: Masterfoods Launches Energy Bar." Advertising Age, June 23, 2003, p. 8.

                                         Simone Samano

INNER BEAST CAMPAIGN

OVERVIEW

Whiskas, a cat-food brand in Mars, Inc.'s Masterfoods USA division, was the world's leading cat food. Its sales performance and brand identity was inconsistent from nation to nation, however, and in the United States at the turn of the millennium it was a middle-of-the pack brand in an increasingly competitive category. Having failed to energize the Whiskas brand through a variety of marketing techniques and packaging changes, Mars switched advertising agencies in 2002, hiring the Los Angeles office of TBWA\Chiat\Day. TBWA's first campaign for Whiskas, "Inner Beast," represented a departure from conventional cat-food advertising.

Budgeted at $20 million and employing the tagline "What Cats Want," the "Inner Beast" campaign sought to show cat owners that Whiskas understood and catered to the instinctual nature of their pets. Rather than con-form to the industry model of depicting cats as cute, lovable, semi-humans who were utterly dependent on their owners' benevolence, TBWA\Chiat\Day dramatized the atavistic ferocity of even the smallest house cats by showing them hunting large prey on the Serengeti. The agency achieved this image by splicing new footage of house cats into stock footage directly reminiscent of nature documentaries. Suspenseful music highlighted the absurd juxtaposition of 10-pound house cats chasing water buffalo, zebras, and impalas that weighed several hundred pounds, and a voice-over proclaimed, "Your cat has an inner beast. Feed it."

In market-research tests the campaign scored well in terms of memorability and entertainment value, and it was considered a successful category-defying new approach to cat-food advertising. Mars handed over an increasing amount of its global advertising duties to TBWA\Chiat\Day, and Whiskas continued to position itself not just as a supplier of cat food but as a brand that understood the true nature of cats.

HISTORICAL CONTEXT

In the 1990s and early 2000s Whiskas was the world's best-selling cat food, but its performance varied dramatically from market to market. While it was the leading cat food in the United Kingdom and Europe, it was only the sixth-best-selling in the United States and was in danger of becoming a stagnant brand there. Whiskas and its agency D'Arcy Masius Benton & Bowles, which was also the lead agency for other brands in Mars, Inc.'s Masterfoods portfolio, had tried a variety of approaches to jump-start sales growth and to make Whiskas stand out from competitors at the brand level. In general, however, they had failed at this task.

One of the most noteworthy among these divergent campaigns was a 1999 series of commercials designed not simply for cat owners but for cats themselves. Based on a concept first tested in Great Britain, where Whiskas was the leader in its category, the commercials opened with a 15-second intro asking cat owners to put their cats in a position to watch the sequence that would follow. What followed was a flurry of darting movements and geometrical patterns, with chirping birds, a scurrying mouse, and a mobile of reflective metal fish, among other images, running in tandem with a soundtrack that included noises undetectable by human ears. Though cat = were intrigued by the spots, according to animal behaviorists at the Mars-associated Waltham Center for Pet Nutrition in Leicestershire, England, their owners in America remained unmotivated to try the Whiskas brand in greater numbers.

In 2002 Mars relieved D'Arcy Masius Benton & Bowles of advertising duties on the various brands it serviced and renewed the search for marketing ideas that would help Whiskas rise above its middle-of-the-pack status in the United States. Mars hired TBWA\Chiat\Day's Los Angeles office to reinvigorate the Whiskas brand.

TARGET MARKET

The "Inner Beast" campaign targeted cat owners. Using the tagline "What Cats Want," the commercials defied industry trends emphasizing the cute and human-like attributes of cats—the unnatural attributes of cats, as TBWA\Chiat\Day saw it—focusing instead on convincing cat owners that Whiskas alone among cat-food brands understood the true nature of their pets. Cat owners, the ad agency felt, did not see their cats as stand-ins for children; rather, they prized the uniquely feline qualities of their pets, even when these qualities resulted in difficult or disturbing behavior. Cats' instinctual nature not only accounted for their most prized qualities, but it also directly dictated the foods they chose, allowing TBWA\Chiat\Day to tie the Whiskas brand logically to its concept. The "Inner Beast" spots attempted to communicate that Whiskas shared cat owners' appreciation for their pets, while raising the brand's profile through humorous, provocative imagery.

TBWA\Chiat\Day thus crafted spots that showed meowing house cats chasing water buffalo, zebra, and impalas on the Serengeti. One of the TBWA creative directors on the account, copywriter Gary Pascoe, told the New York Times, "Any cat owner will tell you, cats are unaware of their size and can't help the lion side of them from coming out. To 10-pound Fluffy at home, the couch is a gazelle and the carpet is the Serengeti."

COMPETITION

The leading cat foods in the United States at the time of the "Inner Beast" launch were Cat Chow, Iams, Friskies, Meow Mix, and 9 Lives. Industry-wide sales declines, together with a wave of corporate consolidation, beginning with Procter & Gamble's 1999 purchase of the premium brand Iams, had recently ratcheted up the levels of competition among these brands and made the Whiskas effort to craft a distinctive image all the more pressing. In 2001 Ralston Purina, the manufacturer of Cat Chow, Meow Mix, and Purina O.N.E. in addition to leading dog-food brands and other pet products, was purchased by Nestlé, the corporate owner of the Friskies brand. As part of the merger, federal regulators concerned about antitrust issues compelled Nestlé to sell the Meow Mix line, making Meow Mix one of the few independent cat-food companies. H.J. Heinz Company in 2002 sold the 9 Lives brand to Del Monte Foods.

Prior to the "Inner Beast" launch, Procter & Gamble was the only one of the major industry players to have recently increased its cat-food advertising budget. With the 1999 acquisition of Iams, the company immediately and drastically increased advertising spending on behalf of all Iams products for dogs and cats. As a result of its marketing and the moving of Iams beyond specialty pet-food stores and into supermarkets and mass merchandisers, Iams sales grew by roughly $200 million dollars during the brand's first year under the Procter & Gamble banner.

The newly independent Meow Mix Company went one better than the 1999 Whiskas commercial crafted for cats: in 2003 the company launched Meow TV, an actual show featuring segments designed for the enjoyment of cats. Budgeted at a miniscule $400,000, the series of two shows ran on the Oxygen cable network and created significant buzz around the brand. Sales, however, remained flat.

BEHIND THE SCENES

John Payne and Gary Pascoe, the TBWA\Chiat\Day creative directors on the Whiskas account, had worked as an art director-copywriter duo for nearly a decade prior to the "Inner Beast" campaign. The two got to know one another in 1994 while taking cigarette breaks at their then-employer, advertising agency the Richards Group of Dallas. They were first assigned to work together on a table-card promotion for TGI Friday's jalapeño poppers and went on to work as a team on beer advertising as well as accounts for Motel 6 and Continental Airlines. They moved together to TBWA\Chiat\Day's Los Angeles office in 1997, where they won assignments for Taco Bell, Sony PlayStation, Infiniti, Levi's, and Nissan. Both credited their ability to come up with the "Inner Beast" concept—showing house cats hunting on the Serengeti—to the fact that they were cat owners. As Creativity reported, Payne had a black short-haired cat named P.T., and Pascoe had an "obese, mentally challenged calico named Barkley."

Nestlé, meanwhile, significantly scaled back total expenditures on its brands Cat Chow, Friskies, and Purina O.N.E. after the 2001 merger that placed them all under the same corporate umbrella. It allotted $29.9 million to the trio, down from pre-merger totals amounting to $39.9 million. In 2004 Nestlé's Purina lines were to be integrated into an unprecedented branded-entertainment effort on NBC. Created by ad agency Fallon Worldwide in concert with prominent network TV producers and writers, the show was to be a satire of the 2004 U.S. presidential election featuring the Cat and Dog parties, with Purina brands heavily integrated into the program. Despite significant excitement over the fact that the show would represent a new format for advertisers, the venture was scuttled because of Purina's financial difficulties.

MARKETING STRATEGY

"Inner Beast" represented not just a conceptual shift in Whiskas' advertising but also a return to its pre-2001 levels of ad spending. After spending only $14 million on Whiskas in 2002, Mars allotted TBWA\Chiat\Day an estimated $20 million a year for Whiskas. The campaign, which was launched in June of 2003, consisted of three TV spots—"Buffalo," "Zebra," and "Impala"—as well as print ads that conformed to the "Inner Beast" theme.

TBWA\Chiat\Day creative directors John Payne and Gary Pascoe, who helmed the "Inner Beast" effort as art director and copywriter, respectively, attributed their understanding of cat behavior in part to the fact that both of them were longtime cat owners. "Cats haven't sold out like dogs have," Pascoe told Shoot. "You can't get cats to lay down or roll over or do any of that silly stuff. They're true to their instinctual nature." When they spent time studying a large body of clips, however, Pascoe and Payne found that this understanding of cats was at odds with the bulk of the cat-food industry's advertising. Noticing the prevalence of unnatural behaviors—singing and dancing, for instance—fallaciously imposed on cats by industry advertisers, the team settled on a working concept of showing cats as they really were. This led them to the idea of dramatizing cats' instinctual aggressiveness in an over-the-top, humorous fashion, by depicting small domestic cats in predator-prey chase scenes reminiscent of nature documentaries.

Director Noam Murro of Biscuit Filmworks, Los Angeles, settled on the strategy for filming the "Inner Beast" spots. Because shooting on location in Africa was not a reasonable option, Murro used stock footage from nature documentaries and edited out the lions in pursuit of their quarry. Trained house cats were then filmed on California ranch land chosen for the similarity of its flora and fauna to that found in the stock footage. Shooting challenges included matching the cats' angles of pursuit in real time to that of the filmed lions, and the primary task confronting editors and effects technicians was the splicing of the individual cats into the chase scenes in a seamless fashion.

"Buffalo," "Zebra," and "Impala" each followed the same template, their primary differences being that of the species of quarry pursued by the house cat in each spot. The commercials opened with footage of groups of animals going about their daily routine, while suspenseful music reminiscent of soundtracks habitually employed in nature documentaries provided an obvious cue to viewers that a predator was lurking somewhere nearby. The suspense built as the hunted animals began betraying signs of fear, so that the revelation that the predator was a small, meowing house cat achieved maximum comic effect. The absurd chase scene then played out after the fashion of the genre, with the music building toward a crescendo as the tiny cat hid behind rocks, bounded across open plains, and closed in on animals that weighed several hundred pounds. A voice-over underscored the campaign's message: "Your cat has an inner beast. Feed it." Whiskas products then appeared onscreen, arranged on top of a rock, and the voice-over added, "Whiskas: made to satisfy a cat's natural instincts." Each spot ended with a purple screen on which the Whiskas logo and the tagline "What Cats Want" appeared.

Accompanying the "Inner Beast" TV spots were print ads that ran in newspapers with coupon inserts. These featured the "What Cats Want" tagline along with a predatory-looking cat lying in the grass as though waiting for its prey.

OUTCOME

According to testing undertaken by the prominent market-research firm Millward Brown, the "Inner Beast" campaign rated far higher in terms of memorability than other cat-food commercials; 63 percent of viewers enjoyed the spots (versus an advertising norm of 37 percent), and 81 percent felt that the work was superior to other cat-food advertising. Market research also revealed that the key message transmitted by the campaign was the one that TBWA\Chiat\Day had hoped to communicate: that Whiskas was the food that suited cats' instinctive preferences.

Mars was so enamored of TBWA\Chiat\Day's "Inner Beast" work for Whiskas that, over the next two years, it awarded the agency's worldwide network more than 40 percent of its international Masterfoods advertising business, including assignments in 70 different countries. Whereas Whiskas had been a minor account for the storied advertising agency, Mars's Masterfoods subsidiaries eventually became one of its most significant clients. The "Inner Beast" campaign was considered groundbreaking for its industry, and the theme of depicting cats' true natures remained in place in subsequent Whiskas marketing initiatives.

FURTHER READING

Champagne, Christine. "Dir. Murro Hunts Big Game for Whiskas." Shoot, July 18, 2003.

Diaz, Ann-Christine. "Gary Pascoe and John Payne, TBWA\Chiat\Day\LA." Creativity, February 2004.

Elliott, Stuart. "A New Pitch for Cat Food Is Based on Celebrating Fluffy's Inner Beast." New York Times, July 8, 2003.

Fera, Rae Ann. "Whiskas Feeds the Inner Beast." Boards Online, July 10, 2003. Available from 〈http://www.boardsmag.com/articles/online/20030710/whiskas.html〉

O'Leary, Noreen. "U.S. Agency of the Year: TBWA\Chiat\Day." Adweek, January 10, 2005.

Pappas, Ben. "Transparent Eyeball." Forbes, June 14, 1999.

Parpis, Eleftheria. "The Tao of Clow: How a Surfer from West Los Angeles Became the Art Director of His Generation and the Soul of Chiat/Day." Adweek, November 17, 2003.

Thompson, Stephanie. "Category Spending Still Stagnant." Advertising Age, June 23, 2003.

―――――――. "Mars Dumps D'Arcy, Citing Office Closure." Advertising Age, May 13, 2002.

"Whiskas: 'Buffalo.'" Adweek, July 14, 2003.

                                             Mark Lane

M&M'S NEW MILLENNIUM CAMPAIGNS

OVERVIEW

In the years 2000 through 2005 M&M's candies remained a brand giant for Mars, Inc., manufacturer of other popular candies, including Skittles, Twix, Starburst, and Snickers. Several ad campaigns for M&M's were released during this period, including the "Global Color Vote" in 2002 and "Help Us Find Our Colors" in 2004. It was during this period that Mars embraced an integrated media philosophy that ensured that a product's television advertising, print ads, Internet elements, and point-of-purchase displays were coordinated seamlessly with packaging, public relations, and other media. Mars executive Peter Littlewood orchestrated the company's many media agencies that were responsible for different aspects of each campaign.

Often promotional in nature, the new integrated campaigns were usually linked to high-profile national events. Promotions also centered on the chocolate candies' famous colors and featured the characters known as the M&M's Spokescandies. The "Global Color Vote" asked consumers worldwide to vote on a new color in 2002. The campaign worked hard to portray this as a news event and succeeded when victorious purple was announced on news outlets such as CNN. Television advertising buys were concentrated on programs with notably huge audiences. For instance, the "Find Our Colors" tie-in campaign showed partying Spokescandies on the Dick Clark's New Year's Rockin' Eve telecast. When the clock struck midnight, the candies' colors vanished. For subsequent months in 2004, black-and-white M&M's were sold in special packaging until their colors were reclaimed on commercials that aired the night of the Academy Awards telecast in March.

The fiercely independent, privately held company generally kept profit details to itself, but Investors Business Daily reported in 2002 that M&M's was responsible for a healthy $2 billion-plus in company revenue, up from $1.5 billion the previous year. The "Global Color Vote" achieved results in the first three months of 2002, with growth reaching double digits for M&M's, while the category as a whole only grew by 3 percent. Most of the M&M's campaigns ran a cycle of about six months before moving onto the next promotion.

HISTORICAL CONTEXT

Mars, Inc., began as a privately owned family business captained by Frank Mars in the early decades of the twentieth century. M&M's milk chocolate candies got their start in Europe, however. Frank's son Forrest Mars was discouraged by his father's conservative business view, so the two parted ways in the 1930s. Forrest went to stake his claim in Europe. There he noticed a unique candy product: lentil-sized pellets of chocolate with a hard sugar coating that kept them from melting. Company legend had it that he saw soldiers with the candy during the Spanish Civil War. He brought the idea back to the states and, working independently of his father's company, introduced the first M&M's candies in 1940. Forrest was an innovator and a shrewd student of business. In what might be described as his first promotional tie-in coup, he managed to get M&M's included in U.S. soldiers' rations in World War II. Upon his father's death Forrest Mars took over Mars, Inc., and merged it with his own candy company.

The brown, yellow, orange, red, green, and violet (a color that was later replaced with tan) candy shells prevented the candies from melting and were a hit with consumers. Hence the memorable longtime slogan "The Milk Chocolate Melts in Your Mouth—Not in Your Hand" was born in the 1950s. Peanut M&M's soon followed as the company's first brand extension. The slogan was used for decades and only began to be phased out when a new long-term device emerged in the form of "Spokescandies," cartoon M&M's candies with faces, arms, and legs. These brand characters were first used in advertisements in 1954 and finally appeared on packages in 1972. The original Red and Yellow characters were one-dimensional images. Later the characters became animated in three dimensions using Claymation techniques. Commercials using the Spokescandies were humorous or cute, intended to appeal to children in particular. There was a significant shift through the 1980s and into the next two decades, when the characters—rather than taste or eating experience—became the focus of the candies' advertising. Television spots in the 1990s paired the Spokescandies with such celebrities as actress Halle Berry and comedian Dennis Miller.

The M&M's brand was a pioneer in the world of advertising with its unique approach to promotions, tie-ins, and cohesive advertising strategies. In 1982 M&M's candies were first provided for astronauts on United States Space Shuttle trips. To highlight M&M's introduction to the international market in the 1980s, the candies became the "Official Snack Food" of the 1984 Olympics. It was in this period that color became another ongoing theme of M&M's advertising and promotion. Holiday-themed candies were introduced: red and green were packaged together at Christmastime, and pastels were sold for Easter. The 1995 color-vote promotion caught the attention at least 10 million Americans, who chose blue to enter the mix. As the year 2000 approached, the M&M's ad team was already thinking ahead. In 1998 it declared M&M's "the official candy of the new millennium." Capitalizing on the Roman numeral M, which meant 1,000, and a preoccupation with the coming millennium, it tied the product in with an enormous worldwide event without having to spend a cent on rights. "M&M's—blatantly exploiting the new millennium," was how one sarcastic, self-deprecating TV spot ended.

TARGET MARKET

M&M's advertisements and promotions were designed to appeal to a wide variety of consumers. Historically the brand's multifaceted campaigns had always considered every age group. The Spokescandies fit the bill perfectly and were honed with every new campaign to attract a broad range of consumers. Their appearance was designed to be cute for little kids, while their attitude was often wisecracking for teen appeal. M&M's aimed television spots in particular at an older audience. Spots that featured the Spokescandies in adult environments or situations were featured in 2001. For instance, satires of an upscale hotel visit or the traditional big box of valentine chocolates that a husband gave a wife were rife with mature subtext. Voting promotions and games on the company website were carefully crafted to appeal to all ages.

COMPETITION

The leaders in chocolate convenience foods had for years been Hershey, Mars, and Nestlé, in that order. In 2001 Hershey's share of the U.S. confectionary market was 30.3 percent, nearly twice that of Mars (16.9 percent) and well above Nestlé (6.3 percent), according to Information Resources, a Chicago research company whose figures did not include sales at Wal-Mart. Hershey, wishing to create even more distance between itself and Mars, adopted Mars's business model of putting the bulk of ad dollars behind its top-three brands. In the October 29, 2001, issue of Advertising Age, Credit Suisse First Boston analyst Dave Nelson observed that Hershey's new president and CEO was "in line with how (Mars) sees the world." He continued, "By marketing big brands, you don't have to spend as much to connect with the consumer, so return on investment is naturally higher." Hershey may have been emulating its nearest competitor's ad strategies, but the advertising philosophies of the number one and number two candy makers remained unique. Hershey concentrated on branding, while Mars continually sought to create an emotional connection with the consumer.

Henri Nestlé invented milk chocolate in 1875, but it was Milton Hershey who made the sweet snack food a household name. Nestlé's lack of diversification of its chocolate offerings had kept it comfortably behind Mars for decades. In 2002, however, Mars had reason to be concerned when reports surfaced that Hershey was for sale. Nestlé was considered to be the prime candidate to snap up the iconic Pennsylvania company. But the sale did not materialize, and Hershey regrouped. Over the next two years the market-share ratios remained roughly the same for chocolate's big three. In 2005 Hershey introduced a new product called Kissables that was remarkably similar to M&M's candies.

MARKETING STRATEGY

Mars spent $195 million on U.S. confection brand advertising in 2000, much of that concentrated on its three top brands, which generated 67 percent of sales. It was at this time that Mars made a shift in how it drove and oversaw media functions, giving its marketing division a more "in-house agency" feel. Executive Peter Littlewood was the man credited with successfully coordinating the vast and various print, TV, public relations, Internet, and other media saturations that accompanied each new M&M's push. In a September 2002 issue of Advertising Age, Bob Gamgort, president of the North American division of Mars, described Littlewood as perfect for the job because of his "terrific experience in brand marketing and his strong interest in broadening outside traditional arenas." M&M's advertising methods for the new millennium were even more creatively geared toward the elements that had brought the brand success in the previous century: high-visibility promotions using the Spokescandies and the color theme in fully integrated cross-media campaigns.

In 2000 M&M's Spokescandies, introduced 50 years before and evolving ever since, were on their way to becoming iconic characters. Each one had a personality and had been growing along with consumers. The two originals were Red, a loveable and slightly pompous milk chocolate, and Yellow, an endearingly absentminded Peanut M&M. Later came supercool Blue and anxiety-ridden Crispy. The only female character, vivacious Green, was created with a wink at rumors suggesting that the green candies were aphrodisiacs. A fall 2001 campaign entitled "What Is It about the Green Ones?" featured a spot in which Green, a glamorous movie star, had her candy shell off when a producer entered her trailer. In another commercial she was a pinup girl on a poster in a teen boy's room. Her picture was stamped on the green candies during the campaign as well.

PET FOOD PROFITS

Forrest Mars invented the canned-pet-food business back when he was in Britain in the 1930s. He convinced pet owners that it would be healthier for their animals than the usual table scraps. A new industry was born, resulting in the Kal Kan, Pedigree, and Whiskas brands that eventually made up 50 percent of sales for Mars, Inc.

Color changes were a key tactic for generating interest. Color votes made consumers feel that they had a personal stake in the product. Blue became a permanent M&M's color by popular U.S. vote. The company had wanted M&M's to be part of the fabric of American life throughout the twentieth century, and with the turn of a new century M&M's was looking beyond U.S. borders. The year 2002 gave rise to the "Global Color Vote" campaign, a six-month effort. M&M's asked citizens of more than 200 countries to pick a new candy color; the choices were pink, purple, and aqua. Purple's victory, revealed on June 19, 2002, was covered on major news outlets such as CNN and on popular TV shows, including The Tonight Show with Jay Leno. Mars even conducted a poll that demonstrated that 40 percent of those polled were aware of purple's win.

Mars continued to find innovative color-themed promotions to renew interest or inspire continued loyalty in the M&M's brand. On a popular New Year's Eve show in 2003 the Spokescandies cavorted with host Dick Clark until the clock struck midnight, and then their colors dramatically disappeared. For the next two months all M&M's packages contained black-and-white candies only. A supporting sweepstakes was held proclaiming, "Help us find our colors." Each winner received cash or a Volkswagen Beetle in a color matching that of the candy they had found in the black-and-white packages. The colors returned to coincide with the Academy Awards ceremony in March 2004. Commercials featuring more vibrantly colored M&M's spokescharacters at a big Hollywood party introduced the slogan "Chocolate is better in color," which ran through May. This exemplified the kind of all-fronts campaign for which M&M's had become known. A buildup of advertisements and promotions that culminated in a focused event ensured high visibility throughout the first half of 2004.

Wherever an event of national significance occurred, Mars seemed to make sure that M&M's was linked to it. A noteworthy 2002 Super Bowl spot was called "Hotel." A man checked into a fancy hotel that promised a complimentary chocolate on the pillow. The next scene showed the man terrified to discover that he was sharing his bed with the Red M&M's spokescharacter. This spot not only stood out for its situational humor but also was even more effective because the audience had come to know Red's persona. "We continue to develop their personalities," said Scott Hudler, brand communications manager for Mars, in a February 2002 issue of Brand Marketing. He further explained, "We don't want them spouting the same lines over and over again." That year 30-second Super Bowl advertising slots were selling for a reported $1.9 million, but Mars purchased last-minute for a cut rate that was worth the high visibility. BBDO New York was responsible for the "Hotel" spot, but the company's integrated marketing campaigns also used the agency Grey Worldwide, New York. Other promotional support work for the brand had come from an unusually large variety of media firms, including but not limited to TJ Paul, Marketing Drive Worldwide, Mediaedge:cia, and Starcom MediaVest Group.

OUTCOME

Mars, Inc., continued to be committed to its private status, and at the close of 2005 it described itself as an $18 billion business. For the company's most celebrated brand, M&M's, the first five years of the new millennium were marked by global success. One of the largest M&M's promotions during that period, the "Global Color Vote" of 2002, produced a U.S. sales increase of 21 percent for the colored candies that year, an admirable feat when compared to category growth of only 3 percent overall. Profit details for the privately held company were rarely disclosed, but Investors Business Daily reported in 2002 that M&M's accounted for more than $2 billion in company revenue, up from $1.5 billion the previous year. In 2005 Mars continued to expand the brand by introducing Dark Chocolate M&M's and Mega M&M's with adults in mind.

FURTHER READING

Angrisani, Carol. "Character Traits." Brand Marketing, February 2002, p. 6.

Baker, Olivia, Maria Puente, and Jerry Shriver. "M&M Embraces Rumors about Those Green Ones." USA Today, p. 1D.

Beirne, Mike. "Calling All Candy Makers." Brandweek, February 4, 2002, p. 23.

―――――――. "Tie-Ins: Masterfoods Sweetens '04 with M&M's, Shrek 2 Pushes." Brandweek, December 1, 2003

Deutsch, Claudia. "M&M's the Top Star on an Ad Walk of Fame." New York Times, September 20, 2004, p. C11.

Elliott, Stuart. "Despite Millions of Viewers, the Super Bowl Is Not Quite So for Madison Avenue." New York Times, February 1, 2002, p. C2.

―――――――. "From Monkeys to M&M's, Madison Ave. Mostly Opts to Entertain the Super Bowl's TV Fans." New York Times, February 5, 2002, p. C6.

Hisey, Pete. "A Taste Explosion." Retail Merchandiser, February 2002, p. 58.

Linnett, Richard, and Jack Neff. "Media Consolidation: Masterfoods Starts Scrap for $300M Account; Review to End by December." Advertising Age, November 3, 2003, p. 1.

Richman, Michael. "Mars Found the Sweet Spot Innovate to Succeed: Candy Maker Crafted M&Ms, Snickers into Snack Staples." Investor's Business Daily, July 12, 2002, p. 3.

Thompson, Stephanie. "Peter Littlewood; VP-Marketing Services, Masterfoods USA." Advertising Age, September 30, 2002, p. S6.

                                             Simone Samano

SNICKERS CRUNCHER CAMPAIGN

OVERVIEW

Mars, Inc., which entered the candy business in 1922, has long been one the top sellers of candy bars in the world. Also notable was that Mars, founded by Forrest Mars, Sr., has remained a privately owned family business, and the company has historically been run in an atmosphere of mystery. Mars has kept its formulas and business practices behind a wall of secrecy, and it has also ventured into new products with extreme caution. Yet the Snickers Bar, introduced in 1930, had long been the top-selling candy bar in the United States, and by 2001 an extension of the product seemed warranted. Mars initiated the expansion of the line that year by introducing the Snickers Cruncher, supporting it with a $40 million television and print campaign.

Mars hired ad agency BBDO New York to introduce the new addition to the Snickers family. In print and television advertising BBDO used the tagline, "Hungry? Crunch this," to portray the candy bar as a positive way to alleviate stress. Such television ads as "Car Alarm," in which a woman shoved a sofa out her apartment window to stop an annoying car alarm below, recommended the Snickers Cruncher as an alternative way to experience a satisfying "crunch."

Within a mere six months after its launch, the Snickers Cruncher became a top-10 candy bar in the chocolate confection category. While the popularity of the original Snickers Bar largely accounted for this success, the humorous campaign also played a role. In 2001 one of USA Today's Ad Track surveys indicated that, within the 18- to 24-year-old age bracket (largely representing the target market of the campaign), 61 percent liked the ads "a lot." The launch of the Snickers Cruncher was so successful that it inspired the usually cautious Mars to introduce another new product in the Snickers line, the Snickers Almond Bar, the following year.

HISTORICAL CONTEXT

In her book The Emperors of Chocolate: Inside the Secret World of Hershey and Mars, Joël Glenn Brenner wrote, "Mars spends an estimated $400 million a year to advertise its products across America, but since its founding, the company itself has operated inside a fortress of silence." In 1989 Brenner was only the third member of the press known to interview anyone inside Mars since its founding in 1922. Established by Forrest Mars, Sr., the son of a struggling candy maker named Frank Mars, the family-owned business was one of the most secretive companies ever to exist.

The company found incredible success, making the Mars family one of America's wealthiest. Its first candy success was M&M's, introduced in 1940. Mars subsequently increased its offerings, although it did so with an air of caution. The addition of the Snickers Bar was one change that seemed to pay off spectacularly. An early model of the nougat-and-peanut candy bar was introduced in 1923, but without a chocolate coating. In 1930 Mars launched a milk-chocolate-coated version, which was an immediate success. The Snickers Bar continued to gain widespread recognition, especially from 1948 to 1952, when it sponsored The Howdy Doody Show.

The Snickers product line eventually expanded. In 1968 a small, fun-size version of the candy bar became available; two years later, the Snickers Munch bar, a candy bar modeled after peanut brittle, was launched. From 1989 to 1990 two more Snickers products hit stores: the Snickers Ice Cream bar and Snickers Miniatures (which were even smaller than the fun size). The Snickers Ice Cream Cone came around in 1996. Still, these products were developed not as new versions of Snickers but as separate products carrying the same theme. In 2001 the Snickers Cruncher, which got its crunchy texture from crisped rice, became the first product offered as a direct extension of the original Snickers bar.

Like many past Snickers products, the Crunchers were marketed with a theme of universal humor that both kids and adults could understand. The debut Cruncher ads, which showed consumers how they could "crunch" out their frustrations, used a similar approach to the then-current Snickers campaign, "Hungry? Grab a Snickers." One such Snickers ad portrayed a hungry football team that was too pumped up to find its way onto the field. This kind of wit was used in Snickers Cruncher advertisements.

TARGET MARKET

Snickers had become America's best-selling candy bar, not only among kids, but among adults, too. Therefore its advertising had to take an approach that would appeal across generations. To achieve this Mars promoted Snickers with a specific kind of humor that involved elements of silliness and wit, which made it appealing to both children and adults. In "Car Alarm," for instance, a woman threw her couch out of her apartment window onto a car below to stop an annoying car alarm. While children might laugh over the sheer ridiculousness of the situation, an adult could better relate to the satisfaction one might achieve from doing such a thing. Mars had established that the core target audience for Snickers was 12- to 24-year-olds, but at the same it kept its older snackers in mind. Such taglines as "Hungry? Grab a Snickers," or "Hungry? Why Wait," coincided with moments that both kids and adults would find funny. It was with a similar approach that Mars targeted the Snickers Cruncher Bar.

COMPETITION

The dramatic rivalry between Mars and the Hershey Company appeared to have been created in fiction. Between them, insults were traded and rumors were spread. They battled for the spot of America's top candy maker, the world's top candy maker, and even the U.S. military's top candy maker. Mars had placed itself inside a fortress, guarded and mysterious. As a private company, it was able to sustain this image more easily than most. Hershey, too, maintained an element of mystery, especially when guarding its chocolate secrets. But as a public company, much more information was made available.

This public information did not appear to have hurt the Hershey Company, which had become the top candy seller in North America. With sales near $4.5 billion (with more than half of this from chocolate alone) and a net income of nearly $600 million, the company had been a phenomenon ever since it sold its first nickel bar in 1900. Over the decades Hershey expanded dramatically, ultimately producing many of the world's favorite indulgences, including Reese's Peanut Butter Cups, Twizzlers licorice, Mounds/Almond Joy bars, York peppermint patties, and Hershey's Kisses chocolates. The company also ventured into the grocery-goods business by selling such products as baking chocolate and peanut butter.

While Mars promoted its new Snickers Cruncher, Hershey was marketing several new products of its own. In 2001, for example, Hershey launched the Big Kat chocolate wafer bar (a larger version of its Kit Kat), which immediately competed with the Snickers Cruncher. But even more significant was Hershey's continual extension of its Reese's line, which represented the biggest competition for Snickers. The Reese's products had been expanding since the peanut butter cup was first introduced in the 1920s. New editions of the product included Reese's Fast Break as well as alternate versions of the peanut butter cup.

Meanwhile, the food giant Nestlé, which offered such chocolate treats as Nestlé Crunch and Smarties, had become the world leader in chocolate sales. In 2004 its sales of candy and cookies reached $7.1 billion. With overall sales exceeding $76 billion, Nestlé had become not only the world's top seller of chocolate but also the number one distributor of food. Among Mars's other competitors was London-based food giant Cadbury Schweppes, which took its own share of the chocolate market. The company, largely known in the United States for its Cadbury Creme Egg, also sold chocolate bars as well as soft drinks, juice products, and gum. In 2004 its total sales neared $13 billion.

MARKETING STRATEGY

Snickers added incredible wealth, in the form of over $250 million a year, to the already lucrative Mars, Inc. The Snickers Bar was first introduced in 1930, when it was sold for a nickel. Soon thereafter, it became an American favorite. In an attempt to reap further benefits from its popularity, in 2000 Mars launched an effort that would add several new products under the Snickers name.

In a $40 million television and print campaign, Mars and its ad agency, BBDO New York, launched Snickers Cruncher, which the Snickers website described as a "crispy, crunchy chocolate bar packed with roasted peanuts, caramel and milk chocolate that's not just crunchy. It's beyond crunchy." Filled with crisped rice, the candy bar seemed to have mimicked Hershey's Whatchamacallit, which was introduced in 1978. But although a goal of the campaign was to steal market share from rival Hershey's, competing with the Whatchamacallit was not the primary focus. In creating a new Snickers line of goodies, Mars intended to do with Snickers what Hershey had done to expand its Reese's line.

EVERY LAST "M"

Mars Inc. aimed for perfection in the manufacturing of its products. Total cleanliness and meticulousness were essential at the company. According to Joël Brenner's book The Emperors of Chocolate: Inside the Secret World of Hershey and Mars, it was said that the bacteria level on a Mars factory floor was less than the average level in a household sink. Such perfection was a goal in all aspects of Mars's manufacturing. Every m on an M&M and each squiggle on top of a chocolate bar were scrupulously tracked. The slightest imperfection on a piece of chocolate caused it to be tossed into the trash, leading to the discarding of millions of M&M's candies on any given day.

BBDO developed a series of creative and witty ads and commercials to promote the Snickers Cruncher. The television spots, including "SUV," "Telemarketer," "Car Alarm," and "Popular Phrases," provided humorous examples of people smashing or shattering things in order to alleviate frustration. In "Car Alarm" a woman, irritated by the sound of a car alarm, shoved a sofa out her apartment window, crushing the offending car. Another spot showed people buying annoying talking dolls from a street vendor, only so that they could stomp them to pieces. After each scene, a voice-over stated the tagline, "Hungry? Crunch this," which suggested that eating the Snickers Cruncher was a more positive way to act on one's urge to "crunch" something.

Mars also considered it important for the campaign to be consistent with advertising for the original Snickers Bar. As Bob Gamgort, the company's general manager for chocolate, explained to USA Today's Theresa Howard, "The feel and humor of the Cruncher ads feels like Snickers…. This is a way to keep them within the Snickers franchise when they are looking for a crunchy texture. That is why the spots have a very simple message." The spots represented the new candy bar as the Snickers that consumers were already familiar with, but with a satisfying crunch.

OUTCOME

Snickers Cruncher met with immediate success. Within six months of its launch it became a top-10 candy bar in the chocolate confection category, according to the Chocolate Manufacturers Association of the United States. While the Snickers name helped to boost the new candy bar to the top, the multimillion-dollar ad campaign also played a role. The television spots, which used the clever humor of regular Snickers campaigns, were hugely successful with viewers. Six months after the campaign's debut, USA Today reported that 34 percent of respondents to its Ad Track survey liked the ads "a lot." This was significantly higher than the Ad Track survey average of 22 percent. Among those aged 18 to 24, the ads were incredibly popular, with 61 percent giving them positive ratings. Because the target market was 12- to-24-year-olds, this latter number marked a triumph of the campaign.

The "Snickers Cruncher" campaign's success contributed to the continuation of the new Snickers line. In 2002 Mars introduced the Snickers Almond Bar. This marked a time of expensive marketing efforts by Snickers. Simultaneously, the Snickers brand became a sponsor of the immensely popular Survivor reality-television show as well as an official sponsor of the NFL. In 2004 the Snickers line was expanded in a way that catered to healthier eaters, with the introduction of Snickers Marathon, an energy bar that boasted of 16 vitamins and surplus of protein. According to Mars, Snickers Marathon was "the first energy bar in history with a taste worthy of the Snickers brand name." The continued expansion of the line sparked new advertisements, which followed the old Snickers theme of smart humor.

FURTHER READING

Beirne, Mike. "Snickers Gives Birth to Cruncher." Brandweek, June 5, 2000.

"Beloved Bars Will Bounce Right Back." Australian (Sydney), July 4, 2005, p. 14.

Brenner, Joël G. The Emperors of Chocolate: Inside the Secret World of Hershey and Mars. New York: Bantam Dell Publishing Group, 2000.

Buckley, Neil, Jeremy Grant, and Juliana Ratner. "Candy's Dandy but Strategy Remains the Key." Financial Times, August 2, 2002, p. 24.

Elliott, Stuart. "Mars Unit Looks to Merge Marketing." New York Times, November 3, 2003, p. 13.

Fairclough, Gordon. "Mars Inc. Faces Unclear Future Due to Death." Wall Street Journal, July 6, 1999, p. 22.

Falcon, Mike. "Super Bowl Ads Neglect Nutrition." USA Today, January 29, 2001.

Guy, Sandra. "Chicago Hosts a Taste of Candymakers' Latest." Chicago Sun-Times, June 6, 2000, p. 54.

Hoffman, Ken. "Candy Bar Ice Cream Best of Both Whirls." Houston Chronicle, June 23, 2000, p. 7.

Howard, Theresa. "Candy Bar Breaks Crispy New Ground." USA Today, June 4, 2001.

Laucius, Joanne, and Zev Singer. "Mars Bars: The Tyrant's Chocolate of Choice: Sweet Treats Found in Tiny Hideout." Ottawa (Ontario) Citizen, December 16, 2003, p. A3.

"Mars Inc." Washington Post, April 25, 2005, p. T60.

Pandya, Nick. "Rise: Cool Companies: No 84 Mars Inc." Guardian (Manchester), July 27, 2002, p. 5.

"2 Candy Makers Raising Wholesale Prices." New York Times, December 12, 2002, p. 14.

                                       Candice L. Mancini

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