US Chocolate Confectionery Market

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U.S. Chocolate Confectionery: Target Market Profitability

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This case was written by Linda M Barton, Ph.D. It is intended to be used as the basis for
classroom discussion and is not about actual management actions. The narrative is supplemented
by an Excel workbook that contains a target market profitability model and analytical templates.
Data used in this case were compiled from published industry and government sources.
The inspiration for this case came from a lecture at Nestlé Rive-Reine, Switzerland, by the late
professor Bernard Dubois of HEC Paris.
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© 2016, Linda M. Barton


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U.S. Chocolate Confectionery: Target Market Profitability

Introduction
The M&M’s brand in the U.S. had a profitability problem. It’s profit rate, as a percent of sales,
was less than the chocolate confectionery average at Mars Inc. Historically, the M&M’s brand
tried to appeal to all segments of the market while its largest competitors targeted market
segments. To improve profitability in 2010, the VP of Confectionery Marketing, Rolando

Provided for use on undergraduate programme: Marketing Principles and Practice, taught by Pierre-Luc Emond, from 1-Oct-2021 to 31-Mar-2022.
Rosato-Rossi1, asked the M&M’s Brand Manager, Tracy Brown, for a new target market strategy
to improve brand profitability.

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The Brand

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The M&M’s brand was launched in 1941 as a melt-resistant, chocolate treat for U.S. troops
during WW II. (Schumm 2014) by Mars, Inc. (Bellis Unknown Yr.). For years, the brand’s
slogan had been "Melt in your mouth not in your hand" (Mars, Inc. 2014). In 2009, the company
Web site described the product as a “…snack sized pieces of chocolate (and peanuts) in a candy
shell…” (Internet Archive Wayback Machine 2008). The product was sold in a variety of
package sizes with the most popular being the single serving size. Seasonal M&M’s were sold
throughout the year (e.g., Halloween).
M&M’s Single Serve Products, 2009
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Source: (Internet Archive Wayback Machine 2008)

Profitability
M&M’s brand profitability, defined as the product contribution (P.C.) in the profit and loss
statement (P&L), was 3.0% of sales in 2009 versus 2.9% in the prior year (Figure 1). In
comparison, the average Mars chocolate confectionery brand P.C. was 4.2% of sales in 2009. For
the 2010 budget year, senior management wanted all of its chocolate confectionery brands,
including M&M’s, to achieve a P.C. target of 4.4% of sales in 2010.
Figure 1: M&M’s Product Contribution (P.C.) % of Sales vs. Mars Inc.
Chocolate Confectionery Average, 2008, 2009, & 2010 Budget Years, U.S.
5.0% 4.4% 4.4%
4.0% 4.2%
4.0%
3.0%
P.C. % of Sales

2.9%
3.0%
2.0%
1.0%
0.0%
2008 2009 2010 Budget
Mars M&M's Mars Average
Source: Hypothetical example for illustrative purposes

1
The names used in this case are fictitious.

© 2016, Linda M. Barton 2


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Prior Year Strategy


In 2009, the M&M’s brand had adopted a mass marketing approach by targeting all four
chocolate confectionery segments and all classes of trade (COT). The brand had spent, on
average, 32% of its sales on advertising and promotion (i.e., consumer & trade) as shown in
Table 1. The average product price was $1.722 and weight was 5.84 ounces per unit.
Table 1: M&M’s Target Market &
Tactical Market Mix Strategies, 2009, U.S.
Target Market Strategy & Tactical

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Amount
Marketing Mix

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Number of Segments Targeted 4
Tactical Marketing Mix:
Retail Price ($/Unit) $1.72

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Product Weight (Ounces/Unit) 5.84 oz.
Promotion Cost as % of Sales 32%
Source: Exhibit I

Objectives
The P.C. objective for M&M’s in 2010 was $71,838 thousand (M)3, an increase of $22,641M
(+46%) over the prior year (Figure 2). Like 2009 results, the 2010 sales revenue objective was
$1,632,690M, and the promotional spending budget was $522M. If sales and profit objectives
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were achieved, then M&M’s profit would be about 4.4%4 of sales. The implication of the
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stretch5, profit objective was the need for brand management to make bold changes in the target
market and tactical marketing strategies; however, major changes would be susceptible to trade
customer risk and sales uncertainty (e.g., a negative consumer and trade customer reaction to a
price increase).
Figure 2: M&M’s 2010 Budget Vs. 2009 Results:
Sales, Product Contribution & Promotional Spending, U.S.
$2,000,000
$1,632,690 $1,632,690
$100,000
$1,500,000
$71,838 $75,000
(000)

(000)

$1,000,000 $49,197 +46% $50,000


$500,000 $25,000
$522 $522
$0 $0
2009 Actual 2010 Budget
Prod. Contr. Promotion Sales

2
Different retail prices could have been observed at the store level because there was variability in trade
customer price markup and promotion strategies.
3
The capital letter abbreviation “M” is the Roman numeral for the number 1,000, and it is a commonly
used in marketing and media planning math.
4
It is possible to achieve both P.C and sales dollar objectives but P.C. % of sales could still be less than
4.4%. This could happen if sales revenues exceeded its objective by more than product contribution
exceeded its objective.
5
This is a stretch objective because brand management is expected to increase P.C. by + 46% with no
additional resources provided (i.e., promotion budget).

© 2016, Linda M. Barton 3


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2009 P&L Summary


M&M’s brand P&L in 2009, at the P.C. level, is summarized in Table 2. The brand’s sales
revenue was $1,632,690M and product contribution was $49,197M or 3% of sales. Product
contribution was defined as the profit & loss (P&L) line before fixed costs (e.g., overhead) and
taxes. Promotional spending in 2009, including advertising, consumer, and trade promotion, was
$521,674M or 32% of sales. This spending level, on a per capita basis, was $1,690 cost per one
thousand (CPM) 6 people. Assuming marketing spending is effective, there was a positive

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relationship between CPM level and brand awareness.

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Table 2: M&M’S Profit & Loss Statement Highlights, 2009, U.S.
Pct. of
P&L Statement Summary Amount

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Sales
Manufacturer Product $ Value ($000) $1,632,690 100.0%
Gross Margin (000) $646,545 39.6%
Contribution Margin (000) $579,605 35.5%
Promotion Costs (000) $521,674 31.6%
Promo. Cost Per Thousand Population (CPM) $1,690 N/A
Net Product Contribution (000) $49,197 3.0%
Source: Exhibit I

Confectionery Size & Growth


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In 2009, the U.S. confectionery market had retail sales of $33,788,000M (Figure 3). The largest
segment of this market was chocolate confectionery at $16,994,000M in sales; however, the
chocolate segment lagged the sugar confectionery, cereal bar, and gum segments in past and
projected compounded annual growth rates (CAGR). The M&M’s brand competed in the
chocolate segment.
Figure 3: Confectionery Market Segment Size in Millions & Growth,
Projected & Past Compound Annual Growth Rates (CAGR) %,
Years 2009-2014 & 2004-09, respectively, U.S.
7%

6% Gum,
$3,736
5% Sugar
CAGR 2009-14

Confectionery,
4% $9,923 Cereal Bar,
$3,135
3%

2%

1% Chocolate,
$16,994
0%
0% 1% 2% 3% 4% 5% 6% 7%

CAGR 2004-09
Source: (Datamonitor 2010)

6
This definition of CPM is not to be confused with the same term used in media planning that refers to cost
per thousand impressions.

© 2016, Linda M. Barton 4


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Mkt. Size & Pop. Growth

The U.S. chocolate confectionery market could be divided into four major segments: Kids (<11
years old), Teens (12-17 years old), Men (18 years and older), and Women (18 years and older)
as shown in Table 3. The largest and fastest growing market segments were Men and Women.
The Teens segment consumed by far, on a per capita basis, the most chocolate confectionery. The
Kids segment was the smallest segment, and it also had the lowest per capita consumption rate.

Table 3: Chocolate Confectionery 2009 Market Size, 2010


Population Estimate, Per Capita Consumption, M&M’s Mkt. Share %, &

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2010-12 Forecasted U.S. Population Growth %, by Mkt Segment, U.S.

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2009 Retail Consump- M&M’s U.S. 2010-
Market U.S. 2010
Market Size tion Per Market 12 Pop.
Segment Population2

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(000) Capita3 Share3 Growth2
Kids <11 $1,614,449 48,836,975 $33.06 14.18% -0.3%
Teens 12-17 $2,702,078 25,344,492 $106.61 12.78% -0.9%
Men 18+ $6,491,784 113,836,190 $57.03 11.36% 2.3%
Women 18+ $6,185,889 120,727,881 $51.24 13.05% 1.9%
1
Total/Ave. $16,994,200 308,745,538 $55.04 12.47% 2.1%
1
Sources: (Datamonitor 2010)
2
(United State Department of Commerce 2010)
3
Exhibit I
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Market Structure & Positioning


Market structure can be described by different characteristics or attributes including segments,
needs, wants, brands, and pricing. Brands can be positioned in a market by their degree of
association with market attributes as defined by connecting lines. The strength of association is
indicated by the thickness of these lines.
For example, M&M’s brand is most strongly associated (i.e., a thicker line) with the treat/reward
need and the Women and Kids segments. This is because of the brand’s configuration (i.e.,
chocolate pieces) and its hard candy shell offers consumers an indulgent product with portion
control, less mess, and ease-of-carrying benefits. In contrast, the Men segment is more closely
associated with the satisfies hunger need that Snickers has successfully targeted.

The chocolate confectionery market consisted of four consumer segments described by consumer
needs, wants, and product segments (Figure 4). These segments were not completely independent
as adults (primarily women) are the family gatekeepers of candy and snacks; however, children
can exert a strong influence on candy purchase decisions (Lackman and Lanasa 1993).
A brand can serve more than one need, but its attributes determine which segment it can serve
best (Venkatesakumar, Ramakumar, and Thillalirajan 2008). For example, an “enrobed”,
sandwich-like chocolate bar such as Snickers was positioned to curb between-meal hunger (Mars,
Inc. 2009). A solid chocolate bar like Hershey’s was an indulgent chocolate treat. Hard, sugar
coated, M&M’s pieces were less messy than chocolate coated confectionery. This made the
brand ideal for carrying, portion control, and sharing with children.

© 2016, Linda M. Barton 5


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Judgmentally, M&M’s competitive set7 included nine brands that totaled about $8.0 billion in
sales or 47% of the chocolate confectionery market. The three major manufacturers were
Hershey, Mars, and Nestlé. They each line-priced their popular single-serving products at $0.99,
$0.89 and $0.79 per unit, respectively.

Figure 4: Chocolate Confectionery Market Structure


& Brand Positioning, U.S., 2009

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Source: Author’s analysis of product attributes and brand positioning


Distribution
The three largest chocolate confectionery classes of trade COT were: 1) mass merchandisers
(e.g., Walmart), 2) supermarkets, and 3) convenience stores in Table 4. Each COT served all four
consumer segments; however, a particular one may be over/underdeveloped in a particular
segment (e.g., convenience store sales are overdeveloped among Men). To accommodate
different consumer needs, brands like M&M’s offered a product assortment of different attributes
like formulation, price, and weight to their trade customers. It was then up to the customer to
choose the M&M’s product assortment that best satisfied consumer demand.
Table 4: Trade Channel Distribution $ Share,
U.S. Chocolate Confectionery, 2008
$ Market
Trade Channel
Share
Mass Merchandisers 16.1 %
Supermarkets 15.3 %
Convenience Stores 15.0 %
Drug Stores 8.6 %
Warehouse Club 7.6 %
Vending Machines 4.2 %

7
A competitive set is the marketing term to describe a group of similar brands that compete for the same
customer(s) and are considered as close substitutes. The Milky Way brand in in the M&M’s competitive
set but not shown included in Figure 4.

© 2016, Linda M. Barton 6


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$ Market
Trade Channel
Share
All Other 33.2 %
Total 100.0 %
Source: (National Logistics Confectioners' Council 2008)
Consumption & Share
The U.S. chocolate confectionery market had about $17 billion in sales in 2009 and was expected
to grow by 1.9% in 2010 (Datamonitor 2010). M&M’s market share, within its competitive set.
was 12.5% in 2009 which ranked it only behind Hershey’s molded chocolate bars in 2009 (Table

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5). M&M’s had its highest market shares in the Kids and Women segments, and its lowest share

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was in the Men segment.
Table 5: M&M’s 2009 Dollar Share & Consumption by Market
Segment & M&M’s Competitive Set, U.S.

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Market Market Segments Size (000) & Share (%)
Share of Competitive
Size (000) Kids Teens Men Women
Set (close M&M’s
& $ Share < 11 12-17 18+ 18 +
substitutes)
(%) Years Years Years Years
Category $ Value (000) $16,994,200 $1,614,449 $2,702,078 $6,491,784 $6,185,889
Category % 100% 9.5% 15.9% 38.2% 36.4%
Butterfinger 2.4% 2.0% 1.8% 2.7% 2.6%
Crunch 2.0% 1.9% 1.9% 1.9% 2.1%
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Hershey's Molded Bars 14.0% 14.3% 13.6% 14.1% 13.9%


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M&M’s 12.5% 14.2% 12.8% 11.4% 13.1%


Milky Way 2.5% 2.0% 2.1% 2.7% 2.6%
Reese's PB Cups 6.7% 6.6% 7.8% 6.3% 6.5%
Snickers 2.4% 1.9% 2.4% 2.8% 2.2%
Three Musketeers 2.0% 1.8% 2.0% 2.1% 1.9%
Twix 2.4% 3.2% 3.3% 1.9% 2.4%
Total Brand $ Value (000) $7,977,500 $770,611 $1,289,742 $2,989,579 $2,927,567
Total Brand $ Share1 46.9% 47.7% 47.7% 46.1% 47.3%
1
Individual shares subject to rounding error
Sources: Total market share from Datamonitor (2010); Demographic shares are hypothetical
Impulse Purchase
Chocolate confectionery products were considered a highly impulsive purchase (Rook 1987).
Therefore, it is important that a brand has high consumer awareness at the point of purchase to
help stimulate impulse sales. That is why confectionery manufacturers like Hershey’s has
invested a considerable amount on consumer and trade customer promotions to support their
brands (The Hershey Company 2011).
Development Index

Development index8 is defined as the ratio of brand segment consumption percentage to


chocolate confectionery category segment consumption percentage, multiplied by 100. It is a
measure of a brand’s consumer strength relative to the category.

The M&M’s brand is most developed in the Kids and Women segments, compared to the
category average, with consumption development indices of 114 and 105, respectively (Table 6).
The Teens segment had nearly the same development as the Women segment at 103, the Men

8
An index is a percentage change from a base number. An index of 100 represents no change. Indices of
110 or 90 represent a +10% and -10% change, respectively.

© 2016, Linda M. Barton 7


516-0016-1

segment, however, was least developed with an index of 91. There may be an interaction between
women/mothers and their children’s purchase decision because of the former’s role as purchase
gatekeeper for kids (Lackman and Lanasa 1993).
Table 6: Brand Consumption &Development by Market Segment, 2009
Segment Share of Category Consumption
M&M’s Brand
Competitive Consump Kids < 11 Teens 12-17 Men 18+ Women 18 +
Set of -tion Years Years Years Years
Brands (000) Pct. of Dev. Pct. of Dev. Pct. of Dev. Pct. of Dev.
Brand Index1 Brand Index Brand Index Brand Index

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Category $7,977,500 9.5% 100 15.9% 100.0 38.2% 100.0 36.4% 100.0

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Butterfinger $415,300 7.8% 82 11.6% 73 42.4% 111 38.2% 105
Crunch $335,200 9.3% 98 15.1% 95 37.7% 99 37.9% 104
Hershey's Bars2. $2,376,200 9.7% 102 15.5% 97 38.5% 101 36.3% 100

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M&M’s $2,119,300 10.8% 114 16.3% 103 34.8% 91 38.1% 105
Milky Way $429,000 7.4% 78 13.5% 85 41.5% 109 37.6% 103
Reese's PB
$1,131,100 9.4% 99 18.6% 117 36.4% 95 35.6% 98
Cups
Snickers $415,300 7.2% 76 15.3% 96 44.0% 115 33.5% 92
Three
$342,900 8.3% 87 16.0% 101 40.7% 107 35.0% 96
Musketeers
Twix $413,200 12.4% 131 21.9% 138 29.7% 78 36.0% 99
1
The Development Index is a ration of the brand segment percentage to a category segment
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percentage, multiplied by 100


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2
All Hershey’s molded chocolate bars
Source: Total brand market share from Datamonitor (2010); Demographic shares are hypothetical
Pricing Strategy
Mars followed a middle-of-the-road pricing strategy that positioned its brands between the
premium-priced Hershey and economy-priced Nestlé brands as shown for the popular single-
serving size shown in Table 7. However, on a cost per ounce basis, M&M’s was one of the most
expensive brands which was a management concern
Table 7: Single Serving Brand Pricing Strategy,
U.S. Chocolate Confectionery Products
Single
Singe Serve Grocery Retail
Manufac- Trade Size
Brand List1 Retail Price3/
turer Markup2 Weight3
Price/Unit Price/Unit3 Ounce
(Ounces)
Mars Snickers $0.76 $0.99 2.07 $0.48
Mars 3 Musketeers $0.76 $0.99 2.13 $0.46
Mars Twix $0.76 $0.99 1.79 $0.55
Mars M&M ’s $0.76 $0.99 1.74 $0.57
23.1%
Hershey Reece’s PB Cups $0.68 $0.89 1.50 $0.55
Hershey Plain & Peanut $0.68 $0.89 1.45 $0.61
Nestlé Butterfinger $0.61 $0.79 2.10 $0.38
Nestlé Crunch $0.61 $0.79 1.55 $0.51
Sources: 1 List Price = Retail Price*(1-% Trade Markup)
2
Estimate
3
Author grocery store audit, December, 2009
Customer Risk
As discussed, a tactical marketing mix strategy that involved a price increase and/or product
weight decrease would likely cause trade customer concern. Further, a to change M&M’s price

© 2016, Linda M. Barton 8


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but not the other Mars chocolate confectionery brands would break the company’s line pricing
strategy (Table 7 above). This would make it more difficult for trade customers to merchandise
Mars products under one umbrella price.
In general, many trade customers would likely resist any pricing action that would hurt their
product demand or profit margins. Customers would also be concerned about a product weight
reduction, without any offsetting benefit to the consumer because this action could hurt product
demand. The trade customer response to negative pricing or product weight changes might be to
threaten a reduction in M&M’s merchandising support or dropping select product from stores to
dissuade such action. The customer response risk of a price increase or weight reduction is

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summarized in Table 8.

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Table 8: M&M’s Trade Customer Risk Given
M&M’s Price and Weight Change Scenarios

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Risk Level Price Weight
High Increase Decrease
Medium Increase No Change
Low No Change No Chg. or Decrease
None No Change Increase
Source: Hypothetical example

Sales Uncertainty
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A sales revenue forecast has inherent uncertainty or margin of error (MOE) because the true
revenue is unknown. Big changes in a marketing strategy (e.g., price) would create more
uncertainty than small changes. To compare alternatives, it is useful to know the uncertainty level
of each choice. The Supplementary Excel Model that accompanies this case provides a sales
revenue MOE to account for sales revenue forecast uncertainty (Exhibit I, cells F42-I42).

Marketing Variables
The marketing variables that M&M’s brand management must choose from are summarized in
Table 9 and are embedded in the Supplementary Excel Model (Exhibit I). The choices are: 1) one
or more of four market segments, 2) one of two average retail price levels9, 3) one of three
average product weights, and 4) predetermined segment promotional spending levels based on
target selection. Management would allow the M&M’s brand to redirect non-target promotional
spending to target market spending. The amount redirected from each non-target segment was
25% of its 2009 promotion spending10. The total non-target segment reduction becomes a
supplemental promotion fund that is allocated to each target segment based on its share of the
target group. The total amount allocated to target and non-target segments must equal the 2009
spending level of $522M.
A promotion budget calculator (BC) in the Model automatically calculates the promotion budget
for each segment, given a market growth rate of 1% and subject to the aforementioned spending
constraints. Alternatively, the Excel Solver Add-in application could be used to make this
allocation. Importantly, the BC and Solver provide the same allocation solution when only one
segment is targeted; however, if there were more than one target segment, then the supplemental

9
Retail price is established by setting a wholesale or manufacturer price that translates into the target retail
price, after a trade markup is added to it. The formula for the retail price calculation is Retail Price =
Whole Price / (1-Trade Markup %).
10
The requirement to limit non-target spending to a 25% reduction from the 2009 level was considered
necessary by management to keep 2010 non-target market share from dropping precipitously.

© 2016, Linda M. Barton 9


516-0016-1

promotion fund allocation would be different because the BC and Solver tools use different
methodologies.
Table 9: Marketing Decision Variables:
Target Market, Retail Price, Product Weight, & Promotion Spending
Target Ave. Retail Average
Promotion Spending
Segments Price/Unit Ounces/
(Auto Calculation)
(Select 1 or More) (Only 1) Unit (Only 1)
 Kids  1.77  5.73 Rule: reallocate 25% of
 Teens  1.72  5.84 promotional budget from

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 Men 18+  6.42 non-target to target

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 Women 18+ segments
Source: Exhibit I

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Management Direction
Rolando Rosato-Rossi, the VP of Marketing, sent a management letter to Tracy Brown, the
M&M’s brand manager, setting the parameters for their strategy meeting in December of 2009
(Figure 5). Management wanted to see a strategy that would achieve stretch financial objectives,
subject to market growth and spending constraints. These objectives will require Brown and her
team to make a bold recommendation including trade risk and sales uncertainty assessments.
Figure 5: Management Letter
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November 1, 2009
From: Rolando Rosato-Rossi, VP Confectionery Marketing, Mars
To: Tracy Brown, M&M’s Brand Manager
Subject: M&M’s 2010 Target Market Strategy
This requests a meeting to discuss a target market and a tactical marketing mix strategy
that will help the M&M’s brand achieve its sales and profit objective for 2010. We are
looking for a strategy that will deliver, at a minimum, $71,838M in product
contribution on sales of $1,632,690M, subject to a fixed marketing budget of
$521,674M. These results would produce an estimated profit margin of 4.4% of sales,
up from 3% percentage points from 2009. At this rate, M&M’s would achieve the
average company chocolate confectionery profit.
For forecasting purposes, assume a conservative 1% market growth rate in 2010.
We have scheduled a strategy meeting on December 1, 2009 to discuss your 2010 target
market strategy. Please come prepared to discuss the following:
1. Recommend a target market and a tactical marketing mix strategy that meets the 2010
brand objectives and spending constraints,
2. Provide a P&L statement that supports the recommendation,
3. Identify trade customer risk and sales forecast margin of error, and
4. Provide a rationale why the recommended strategy is better than the best alternative.
Please do not hesitate to ask if you have any questions before our December meeting.

© 2016, Linda M. Barton 10


516-0016-1

TOP Screener
The M&M’s brand management team has developed the arena, opportunities, and profit potential
(TOP) screener shown in Figure 6 to evaluate target marketing strategies. The screener has three
stages, each with a set of criteria to vet a strategy. Once defined, the criteria for The Arena Stage
is market structure, size, and growth criteria. The Opportunities Stage evaluates brand
development, market share, differentiation, and feasibility criteria. Finally, the Profitability Stage
evaluates target profitability, trade customer risk, and sales revenue uncertainty.
Figure 6: The Arena, Opportunities Profit Potential (TOP) Screener

Provided for use on undergraduate programme: Marketing Principles and Practice, taught by Pierre-Luc Emond, from 1-Oct-2021 to 31-Mar-2022.
& Individual Screener Criteria

This document is provided as part of Undergraduate Case Teaching Licence UG-R-2021-9330-29-A for The York Management School.
Order ref F427721. Usage permitted only within these parameters otherwise contact info@thecasecentre.org
Educational material supplied by The Case Centre
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.
Source: Author’s construct

Target candidates can be ranked using the TOP screener methodology provided in the
Supplementary Excel Workbook.

© 2016, Linda M. Barton 11


516-0016-1

Bibliography
Bellis, Mary . Unknown Yr. "History of M&Ms Chocolate - Forrest Mars." about .com. Accessed
March 31, 2015. http://inventors.about.com/od/mstartinventors/a/ForrestMars.htm.
Datamonitor. 2010. Confectionery in the US - Market Forecast & Consumption Demographics.
London: Datamonitor Group.
Internet Archive Wayback Machine. 2008. "Mars M&M's." Wayback.com. April 22. Accessed
March 31, 2015.

Provided for use on undergraduate programme: Marketing Principles and Practice, taught by Pierre-Luc Emond, from 1-Oct-2021 to 31-Mar-2022.
http://web.archive.org/web/20090422053115/http://www.mars.com/global/Global+Brand
s/Snackfood/M+Ms.htm.

This document is provided as part of Undergraduate Case Teaching Licence UG-R-2021-9330-29-A for The York Management School.
Lackman, C., and J. M. Lanasa. 1993. "Family decision-making theory: An overview and
assessment." Psychology & Marketing (1986-1998) 10 (2): 81. Accessed December 23,

Order ref F427721. Usage permitted only within these parameters otherwise contact info@thecasecentre.org
2015. Retrieved from
https://ezproxy.brenau.edu:2040/login?url=http://search.proquest.com.ezproxy.brenau.ed
u/docview/230399320?accountid=9708.
Mars, Inc. 2014. "M & M's - Melt in your mouth not in your hand." YouTube.com. May 31.
Accessed March 31, 2015. https://www.youtube.com/watch?v=BZUccKFxTS4.
—. 2009. Snickers Satisfies You - 1986 Commercial. August 26. Accessed February 3, 2016.
https://www.youtube.com/watch?v=Ll9pIcOsBE0&feature=share_email.
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

National Logistics Confectioners' Council. 2008. "World and U.S. Chocolate Confectionery."
nclcworld.com. June 9. Accessed March 21, 2012.
http://www.nclcworld.com/pdf/Confectionery%20Market%20by%20Jim%20Corcoran.p
df.
Rook, Dennis W. 1987. "The Buying Impulse." Journal of Consumer Research (Oxford
University Press) 14 (2): 188-199. Accessed December 28, 2015. Retrieved from
http://www.jstor.org.proxy.library.cornell.edu/stable/2489410.
Schumm, Laura . 2014. "The Wartime Origins of the M&M." HISTORY.com. June 2. Accessed
March 31, 2015. http://www.history.com/news/hungry-history/the-wartime-origins-of-
the-mm.
Sivakumaran, B., and P. K. Kannan. 2002. "Consideration Sets Under Variety Seeking
Conditions: An Experimental Investigation." Edited by Valdosta, GA eds. Susan M.
Broniarczyk and Kent Nakamoto. Advances in Comsumer Research (Association for
Consumer Research) 29: 209-210.
The Hershey Company. 2011. "The Hershey Company CAGNY Conference Presentation."
thehersheycompany.com. February 23. Accessed March 21, 2012. http://phx.corporate-
ir.net/External.File?item=UGFyZW50SUQ9ODI5NTJ8Q2hpbGRJRD0tMXxUeXBlPT
M=&t=1.
United State Department of Commerce. 2010. American FactFinder. Accessed March 21, 2012. :
http://factfinder2.census.gov.
Venkatesakumar, R., D. Ramakumar, and P. Thillalirajan. 2008. "Problem Recognition Styles
and Attributes Evaluation - An Approach to Market Segmentation." Journal of
Management 128-138.

© 2016, Linda M. Barton 12


Educational material supplied by The Case Centre
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© 2016, Linda M. Barton


Source: Supplementary Excel Model

13
Exhibit I: M&M’s Supplementary Excel Model, 2009 Results
516-0016-1

Provided for use on undergraduate programme: Marketing Principles and Practice, taught by Pierre-Luc Emond, from 1-Oct-2021 to 31-Mar-2022.
This document is provided as part of Undergraduate Case Teaching Licence UG-R-2021-9330-29-A for The York Management School.
Order ref F427721. Usage permitted only within these parameters otherwise contact info@thecasecentre.org
516-0016-1

Exhibit II:
Ranking of Opportunities by Product Contribution

Product Revenue
Sales P.C. Vs. Trade
Option #)

M&M's Contrib- Forecast


M&M's Target & Tactic Vs. Object- Custo-
Sales ution/ Margin
Strategies Objec- ive mer
(000) P.C. of Error
tive (000) Risk
(000) Pct. ±
2009 Results
No Targeting, $1.72, 5.84 oz. $1,632,690 N/A $49,197 N/A N/A N/A

Provided for use on undergraduate programme: Marketing Principles and Practice, taught by Pierre-Luc Emond, from 1-Oct-2021 to 31-Mar-2022.
Meets 2010 Objectives1 $1,632,690 $0 $0 $71,838 N/A N/A

This document is provided as part of Undergraduate Case Teaching Licence UG-R-2021-9330-29-A for The York Management School.
1
2
3

Order ref F427721. Usage permitted only within these parameters otherwise contact info@thecasecentre.org
4
5
6
1
Assumes 1% market growth and $521,674M promotion budget for all options
Source: Exhibit I Model calculations
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

© 2016, Linda M. Barton 14

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