Page 1: Introduction
There is a substantial ice cream market in the UK. In recent years it has been transformed by the development of new product lines and by the entry of new firms into the market. This case study focuses on a particular sector of the ice cream market - impulse ice cream - and outlines some of the challenges Mars has faced in entering this market. The impulse ice cream market consists of single wrapped, items of industrially-manufactured ice cream, sold for immediate consumption.The Unilever group of companies is the market leader in impulse ice cream products in most Member States of the European Union.
Before reading the case study materials, make a list of problems which Mars might have encountered in seeking to enter the impulse ice cream market. In business, particular markets often become associated with particular producers and product lines. These producers build up a competitive advantage usually as a result of listening to consumers and providing customer-focussed products. However, in the course of time, the market may change because, for example, new producers enter the market, or because consumer tastes change. This often means that existing producers become very defensive and try to hold on to their position of dominance. It is as if the existing producers are protected by a ring of competitive advantage. Initially this ring will be strong, but it will weaken as competition emerges.
Existing producers then try to re-strengthen the ring in order to restore their competitive advantage, e.g. by cutting prices, developing new innovative lines, resorting to anti-competitive practices, etc. Sometimes, they succeed, but at other times, they are forced to recognise that times have changed.