FIGHTING FOR YOUTH'S SWEET TOOTH MARS VS. FERRERO IN GERMANY

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A very public ad battle over Germany's chocolate candy market will be fought this spring when two very private family companies clash. Mars Inc. will spend $13 million in its biggest challenge yet to German kids' confectionery leader Ferrero, where a $39 million budget is being sweetened in response.

After dallying for seven years with the idea of creating a children's line under the Milky Way umbrella, Mars is finally doing so. This month Mars is rolling out three new kids' products with a TV and poster campaign by BSB Frankfurt.

Ferrero, the Alba, Italy-based family company with sales estiated at $4 billion, "won't sit still now that Mars is entering the children's chocolate market," said an agency executive with extensive confectionery experience. "I suspect Ferrero will increase its ad budget for the line and also start promotions for their products."

The print effort for Milky Way Safari, tiny milk chocolate bars filled with creme, shows kids in safari wear playing with monkey-, lion-, elephant- and parrot-shaped stuffed animals.

A pool of three TV spots is supporting Safari and two other products, Milky Way Crispy Rolls, chocolate-covered wafers with a creme filling that Mars prefers to call "milk creme" because of its high milk content, and Milky Way Chokos, chocolate-covered bars with a mixed crispy and creme filling.

Using the same characters as in the print, the Safari TV spot takes place in a fantasyland where stars fly out of a milk can and lakes are made of milk that turn into little Safari bars. After the "stuffed" animals come to life, they and the children end up happily ever after together in a jungle. A voiceover throughout touts the candy's good taste and closes with "The new Milky Way Safaris. The secret is the milk."

Like Ferrero, Milky Way advertising plays up the brand's high milk content to convince mothers that it is preferable to other confectionery products.

"Our new strategy targets the needs of kids and focuses on the mother who must buy the products," said Andreas Graef, Mars' marketing manager in Germany.

Ferrero, ever aggressive, is taking the "good-for-you" battle a step further with a refrigerated milk chocolate snack. After a year's test in Frankfurt, the company is rolling out Pingui, a chocolate-covered roll filled with milk creme. Ferrero has supported the test with TV created in-house that points out the product's freshness, but would not disclose rollout plans.

For its more directly competitive Kinder line, separate TV commercials are aimed at parents and children. In one spot aired during daytime children's programs, a cat named Kater Klau tries to steal Kinder chocolate from a little boy called Charly.

Another commercial, broadcast in the evening, features a mother advising her husband who wants to buy sweets for their kids, "You must buy Kinder chocolate [because] it contains an extra portion of milk for children."

The Kinder chocolate range, including creme-filled chocolate rolls and chocolate bars filled with creme, rice, wheat and corn, is handled jointly in-house by Ferrero and by TBWA, Frankfurt, and Wueschner, Rohwer, Albrecht in Munich.

Ferrero wouldn't comment. But it isn't expected to allow Mars to cut into sales of its five-product Kinder, meaning children, line, which accounts for more than half of the $700 million German children's confectionery segment.

Ferrero already brings twice the advertising clout to the product battle, with a $39 million ad budget devoted to its kids' products alone in 1993. The company has also been steadily hiking its ad budget in recent years, spending $148 million in 1993 for all its lines, up from $99 million in 1991. In Germany, Ferrero is more innovative, with Mars lagging far behind and trying to catch up.

"The plan to launch a complete Milky Way kids' line goes back to 1987, but Mars is very slow [in Germany] with innovations," said an ad agency executive with confectionery experience.

As a result, in the 1980s Ferrero passed Mars in Germany to become the largest confectionery marketer, with estimated sales of $1.5 billion of the total $5 billion category. Mars, whose German sales declined 2% last year to $600 million, ranks second or third along with Kraft Jacobs Suchard.

KJS introduced its own children's chocolate line last year under the Milka brand backed by ads from Milka agency Young & Rubicam, Frankfurt. The main product, Milkini, consists of milk chocolate sticks with a creme filling.

As part of the repositioning of Milky Way, Mars reformulated the candy bar in 1990 with a new milk cream filling and introduced Milky Way sandwich spread, a spreadable chocolate, in 1991 and a Milky Way ice cream bar in 1992.

Despite this, Milky Way is not a major Mars brand in Germany; its annual sales of $34.4 million represent only 5.7% of Mars sales.

Mars declined to comment on expansion plans for the new Milky Way.

Ferrero's product range varies in Europe, the U.S. and Japan but many of its most successful and profitable products are individually wrapped chocolates such as Ferrero chocolate-covered cherry kisses and Rocher chocolate and nut balls.

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