How Mars transformed the ice cream market
A Masterfoods case study

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...
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Page 2: Change in the ice cream market

The ice cream market provides us with a fascinating example of a transformed market. In the late 1980s, Walls ice cream stood as the established market leader. Walls is a household name, with a long-established reputation for providing family ice cream. It was able to produce large quantities of ice cream at low cost. In business we talk about firms developing a competitive edge through 'the...
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Page 3: Mars´ ice cream products

At the end of 1988 Mars launched its ice cream in the UK and Ireland. The ongoing success of this product has led Mars to take advantage of its technological breakthrough to produce a wide variety of ice cream products. Here are just some of the brands produced by Mars: BOUNTY GALAXY DOVE MARS MILKY WAY OPAL FRUITS SNICKERS SPANGLES TWIX
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Page 4: Penetrating the market

It is not always easy to penetrate an existing market. Although Mars has transformed the ice cream market, it had initially to compete against established relationships and vested interests in this market. The biggest stumbling block for Mars was in getting its Mars ice cream bars into retail outlets.Walls, which had the giant's share of the impulse market (lollies and ice creams bought...
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Page 5: Frustrating times

Mars was understandably frustrated about the restraints on free competition resulting from freezer exclusivity in the impulse ice cream market. Since the launch of Mars ice creams in 1988, Unilever (which owns Wall's) has sought to prevent retailers from stocking competing companies products in their exclusive freezers. A brief summary of the legal dispute between Unilever and Mars is set out...
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Page 6: Unilever´s case

Unilever put forward the argument that 'the provision of brand-linked freezer cabinets is in the best interests of the trade and the consumer because it allows the widest possible availability of impulse ice creams, in good condition, at affordable prices.' Unilever argue that they need to 'protect our assets from piracy by other ice cream suppliers.' They argue that they are making an 'overall...
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