Mars Inc.: merger of the European food, pet care and confectionery divisions
Mars Inc. is a diversified multifunctional company whose primary products include foods, petcare, confectionery, electronics and drinks. Owned and controlled by the Mars family, this US giant is one of the world's biggest private companies, but also one of the most secretive. Mars' decision in January 2000 to merge its food, pet care and confectionery divisions across Europe - and eventually with headquarters in the UK - has split the marketing industry.
The most well-known brands within the three divisions are: foods: Uncle Ben's rice and sauces; pet care: Whiskas, Pedigree; confectionery: M&Ms, Snickers, Milky Way, Mars Bar. Mars UK says the decision to pool the businesses was taken to strike at the company's international competitors in food and confectionery, such as Nestlé and Unilever.
The move also coincides with plans to create a single European market and highlights the company's belief that its consumers' needs are the same across the continent. However, the combination of food and confectionery with pet care is not clear to all industry observers. One industry analyst made the comment: Generally speaking, Mars is doing the right thing by merging divisions to squeeze profits out of them. Before the advent of the euro it was acceptable to run separate companies in different European countries but not any more. Another analyst said: ‘I can't imagine it marketing all three sides of the business together. They're too different.
The only visible benefit appears to be an improvement in distribution. Tastes across European markets are very different, whether you're selling products for animals or people. It's all very well Mars saying it will tackle competitors such as Nestlé and Unilever, but they are only rivals in food and confectionery. If Mars starts laying down too many controls by merging all its businesses - and therefore also its marketing and management strategies - it may streamline communications, but could lose the creativity available in different regions
QUESTIONS
1. Discuss the two views of organizing Mars' European activities.
2. Did Mars Inc. do the right thing in your opinion?