Mars Inc.

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Frank C. Mars founded Mars' predecessor Mar-O-Bar Co. in 1922 in Minneapolis. In 1924, he introduced the Milky Way bar, which had sales of nearly $800,000 in its first year. By 1929, the renamed Mars was producing 20 million candy bars a year.

Mr. Mars began advertising his business early, putting $300 mostly into point-of-sale materials. He later expanded into outdoor and, in 1929, began using national magazines, including Collier's and The Saturday Evening Post.

Forrest Mars

In 1928, after graduating from Yale University, Forrest Mars, Frank Mars's son from his first marriage, joined the company. The marketer continued to expand its offerings, introducing Snickers in 1929 and 3 Musketeers in 1932; Mars reached $25 million in sales that year. The relationship between father and son, however, proved less productive, and in 1932, Frank Mars asked his son to leave, giving him $50,000 and the foreign rights to Milky Way.

Forrest Mars moved to Europe, eventually settling in southern England, where he created the Mars bar; by 1939, he had turned his company, Mars Ltd., into the No. 3 candy marketer in England. He also bought, Chappel Brothers, a small company that canned meat by-products for dog food. He renamed the company Petfoods Ltd. and promoted the product as more nutritious than its rivals; within a few years, Petfoods dominated the pet food market in Europe.

At the start of World War II, Forrest Mars returned to the U.S. with an idea for a new candy product. After his father died in 1934, control of Mars Inc. had passed to Frank's second wife and their daughter, so Forrest approached William Murrie, president of Hershey Chocolate Co. (Rather than being viewed as a rival, Hershey at the time was supplying Mars Inc. with the chocolate covering for its products.) In 1940, Mr. Mars and Mr. Murrie's son, R. Bruce Murrie, formed M&M (for Mars and Murrie) Ltd., based in Newark, N.J., to produce the new M&M's candy.

During the war, Hershey kept the company supplied with chocolate; because M&M's product did not melt in tropical climates as other chocolate candy did, M&M's were sold to the U.S. government, which put the candy into food kits for soldiers. In 1949, Mr. Murrie left the business, selling his share of the company to Mr. Mars for $1 million.

"Melts in Your Mouth"

In 1950, Mr. Mars hired Chicago-based Ted Bates & Co. to boost sales. Bates' Rosser Reeves touted M&M's composition—chocolate surrounded by a hard, sugar shell—and developed the now-classic slogan "Melts in your mouth, not in your hand" for M&M's.

In 1954, Bates introduced the cartoon characters Mr. Plain and Mr. Peanut, representing Peanut M&M's, which had been introduced that year, then launched an animated spot that showed M&M's characters jumping into a chocolate pool before rinsing off in showers that coated them with their shells. The spot ran on children's TV programs such as "The Howdy Doody Show" and "The Mickey Mouse Club." By 1956, sales hit $40 million and M&M's was the No. 1 candy in the U.S.

Mars Inc., meanwhile, was growing. When Frank Mars' second wife died in 1945, she left Forrest half her stock in the company, as stipulated by Frank Mars' will, and Forrest had rejoined the company while still running M&M Ltd.

In the first half of the 1950s, Mars Inc. was using Leo Burnett Co., Chicago. In 1956, Burnett resigned the $2 million account, and Mars moved it to Knox Reeves Advertising, Minneapolis. At the time, Mars continued its TV sponsorships and also advertised in newspapers, magazines and comic books. Three years later, Mars again moved its account, valued at $3 million, this time to Needham, Louis & Brorby, Chicago, which introduced "Mooky," the animated cow, to create an image for Mars products. The company also ceased national TV advertising and turned to local spot TV and outdoor advertising.

Corporate consolidation

At about that time, Mr. Mars began a campaign to expand and automate Mars' candy production. Mars' makeover was completed in 1959, and the marketer became the largest producer of chocolate-covered candy bars in the U.S. In 1964, Mr. Mars' half-sister sold him her share of the company, and Mr. Mars consolidated his various businesses under the umbrella of Mars Inc. Mr. Mars owned the original Mars Inc., M&M Ltd., Uncle Ben's rice (developed from a rice mill that he acquired in 1942), the No. 4 candy company in Europe and the largest pet-food marketer in the world.

Following the consolidation, Mr. Mars concentrated on outfitting the company to produce its own chocolate, and in 1965, he notified Hershey that Mars would phase out its use of Hershey's chocolate coating.

In 1966, Mars Inc. spent $8 million advertising its confectionery division, split almost evenly between Ted Bates & Co. and Ogilvy & Mather, both Chicago. In 1968, the division, renamed M&M/Mars, consolidated its account at Bates. (Earlier in 1966, Mars Inc. had expanded its petfood empire with the purchase of Kal Kan in the U.S.)

In 1970, Hershey launched it first ad campaign. Two years later, faced with spiraling sugar and cocoa prices, Hershey withdrew its advertising entirely despite some early success. In response to Hershey's retreat, Mars Inc. aggressively expanded its advertising and, in fall 1973, it surpassed its rival, emerging as the top U.S. candy marketer for the first time.

In 1972, Forrest Mars retired, turning the company over to his children, Forrest Jr., John and Jacqueline. In 1980, he came out of retirement to launch Ethel M. Chocolates, a line of fine, liqueur-filled chocolates named after his mother; he died on July 1, 1999, in Miami.

After Mr. Mars' retirement, Mars Inc. continued its aggressive advertising efforts, adding D'Arcy-MacManus & Masius to its agency list in 1976 and introducing its memorable "A Snickers Really Satisfies" campaign. It also introduced Starburst Fruit Chews and Twix bars that year.

At the same time, a commercial that showed a glass of milk turning into a Milky Way bar drew a consent order from Federal Trade Commission under which Mars agreed not to misrepresent the nutritional value of its products.

Industry obstacles

In the mid-1970s, sales of M&M's suffered when government studies linked two red food dyes with cancer. Despite the fact that the food colorings implicated in the studies were not used in the candy, Mars ceased production of red M&Ms for a time.

Mars, however, continued its aggressive advertising, increasing ad spending for M&M/Mars to $36.1 million in 1980, a 46.4% increase over 1979 (which, in turn, represented a 51% increase over expenditures in 1978). By 1979, Mars held 36% of the chocolate bar market in the U.S., leading Hershey, with 29%.

In 1980, Mars became even more aggressive, increasing the size of its candy bars by 20% to 30% while holding its wholesale prices steady. But by 1984, Hershey had gained ground, partly through several new products. Its share of the candy bar market stood at 36%; Mars was only slightly ahead, at 37%.

In the 1980s, the candy industry in general faced the problem of declining consumption overall. Mars once again took an aggressive approach. In 1986, it launched Kudos, a chocolate-covered granola bar, with a $4.5 million media campaign. Within a year, the product had captured 20% of the highly competitive $387 million granola bar category in the U.S.

Mars also reformulated its U.S. Milky Way, making it less sweet, and backed the move with an $8 million campaign from Bates, which by then was known as Backer Spielvogel Bates. In 1986, Mars acquired DoveBar International, an ice cream specialties marketer, and assigned the $10 million account for its Dove Bar and Rondos to Grey Advertising, New York.

Despite Mars' efforts, in 1988, Hershey overtook it, becoming the No. 1 U.S. candy marketer and securing 39% of the U.S. candy market with its purchase of Cadbury Schweppes' U.S. operations.

In response, Mars mounted an aggressive marketing and product push through the early 1990s. It signed a multiyear marketing agreement with the Walt Disney Co.; launched a number of line extensions, including Peanut Butter Snickers and new flavors for Kudos, Twix, Starburst and Skittles; expanded its seasonal candy offerings; introduced Bounty, a chocolate-covered coconut bar popular in Europe, to the U.S. market to compete with Mounds and Almond Joy; and in January 1990 reintroduced Forever Yours as Milky Way Dark.

In 1991, it launched Dove chocolate bars via Grey and in April 1992 introduced Milky Way II, with 25% fewer calories and less fat than Milky Way. It also began emphasizing the Mars name on its products and launched an umbrella campaign with the theme "Making life a little sweeter—Mars" via DMB&B.

Brand building

In the 1990s, Mars expanded internationally, opening plants in Russia and China, and moving to a more standardized advertising and sales promotion approach. It reduced the number of different brand names it used worldwide, giving its chief products a single name in all markets as well as consistent packaging worldwide.

Mars became a heavy user of consumer promotions using sampling, coupons, premiums, rebates, contests and sweepstakes, bonus packs and price-off incentives. In one unusual contest, handled by BBDO Worldwide, consumers were invited to choose the next new M&M color; blue was the winner.

BBDO, which won the account in 1995 after Mars dropped Bates, also stirred new interest in Mars' products with a campaign for Snickers using the idea that Snickers was the one candy bar to have available if "you're not going anywhere for a while."

The agency also revived the use of M&M's candy spokescharacters, named Red, Yellow and Blue to coincide with their shell colors, telling hungry consumers that M&M's was the "Candy of the new millennium, MM means 2000." In addition, Green, the first female M&M was introduced. At the end of the 20th century, Mars Inc. was the leader in the global candy market.

In fall 2001, Mars Inc. reorganized its U.S. divisions under one umbrella group called Masterfoods USA.

In January 2002, Masterfoods launched a $45 million global promotion for M&M’s that allowed consumers worldwide to vote on the next color for the candy. Later in 2002, Masterfoods pulled brands including Skittles and Uncle Ben’s from longtime agency D’Arcy Masius Benton & Bowles just before the agency closed its doors, shifting much of the work to TBWA/Chiat/Day, Playa del Rey, Calif.

In late 2003, citing the need to develop more strategic alignments, Masterfoods consolidated most of its $300 million media buying and planning with Starcom MediaVest Group’s MediaVest unit. The company kicked off an innovation burst with the launches in 2003 of Snickers Marathon energy bar and AquaDrops mints and in 2004 moved into gum with a Skittles branded entry and into the bar chocolate arena with M&M-filled M-Azing.

For 2003, Mars had worldwide sales of $18 billion, down 2.7% from 2002. Mars ranked No. 41 among U.S. advertiser in 2003, with ad spending of $813.4 million, up 24.5% from the previous year, according to Advertising Age.

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