M&M's History and Success in the Candy Market

M&M’s History

M&M’s has created a market share that has yet been unmatched by the

competition. In 2004, M&M’s achieved an impressive $201 million in candy sales in the

U.S. alone, making it the number one selling bagged or boxed chocolate candy in the

country, beating out its nearest competitor, Hershey’s Kisses (Candy Industry). The

success of M&M’s is due to many factors such as attractive and unique advertisements

and promotions, customer participation and feedback defining the produced output, and a

wide range of customized product possibilities.

The creation of M&M began when Forrest Mars Sr. made a trip to Spain during

the Spanish Civil War (M&M’s website). While there, he came across some soldiers

who were eating chocolates pellets covered in a hard sugar coating. The main purpose of

that hard sugar coating was to maintain the chocolate freshness and prevent it from

melting. Upon his return to the United States, Mars Sr. returned to his kitchen and

invented the recipe for M&M’s Plain Chocolate Candy (M&M’s website). As could be

deduced from the name, the founder is a member of the Mars family, the group

responsible for Mars Inc (M&M’s website). Mars today owns many companies

producing and distributing products worldwide, one of which is MasterFoods; which

produces M&M’s (www.masterfoods.com).

By late 1940, M&M’s Plain Chocolate Candy became widely available to the

public and received a great reception (M&M’s website). The public was impressed with

the unique qualities of the product that were previously unmatched in the market. It was

soon after that the candies became a favorite among American Soldiers serving in World

M&M’s Competitor Brand Analysis 1

War II, for the same reason that they were popular in Spain (M&M’s website). They

were durable candies that could withstand heat and wouldn’t perish over a long journey.

By the 1950’s, the intense television and advertising campaigns designed to

market M&M’s Plain Chocolate Candies had made them a household name (M&M’s

website). In 1954, M&M’s expanded the brand offering and introduced M&M'S Peanut

Chocolate Candies; sales of both varieties continued to grow (Candies with Attitude).

This expansion gave way to the creation of the defining brand

characteristics of today; the characters and the slogan. Red and

Yellow made their debut in 1954, bringing with them the slogan, “The

milk chocolate melts in your mouth not in your hand (M&M’s website)." Both the

characters and the slogan became the basis for continued TV and radio advertisements.

Several decades later, the company determined it was time to expand its product

offerings to provide customers with seasonal options. In the early 1980s, a special

holiday line of M&M'S Chocolate Candy products was launched (M&M’s

website). The new seasonal color blends included red and green colors for

Christmas, and pastel colors for Easter. Also in the same decade, M&M'S

Brand accelerated its international expansion entering the European, Asian and

Australian markets (M&M’s website). In 1981, M&M'S Chocolate Candies were chosen

by the first space shuttle astronauts to be included in their food supply (M&M’s website).

M&M'S Chocolate Candies are now on permanent display at the space food exhibit of the

National Air & Space Museum in Washington D.C. (M&M’s website).

In the 1990’s a huge marketing event surveyed Americans about the new color to

appear in the traditional Chocolate Candies color mix. Blue color earned his position


inside the color mix with 54% of the total votes (M&M’s website). Also during this

decade, three other varieties were brought to the M&M’S Brand portfolio, the Peanut

Butter Chocolate Candies, the Almond Chocolate Candies and the Chocolate Mini

Baking Bits (M&M’s website).

In 1996 a strong advertisement campaign utilizing the M&M’s Brand Characters

catapulted the M&M’s Candies Chocolate popularity and as a result of this campaign,

which gained the first position among sixty different campaigns rated by USA today, the

new characters popularity became synonymous with Mickey Mouse and Bart Simpson

(M&M’s website). During 1997, M&M Worlds, the brands own retail store, launched its

grand opening in the city of Las Vegas ( M&M’s Collectors Club). This unique store

brings to the customers all the colors and fun of M&M’s Chocolate Candies into a one of

a kind retail merchandiser, ranging from T-shirts, designer dresses, jewelry and furniture.

In 2001 and 2002 M&M’s brand not only they launched a new global website to

reach foreign markets, but they also conducted the M&M’s Global Color Vote were

M&M customers from 200 different countries voted for a new M&M Brand Color1

(CNN/Money).

1
http://money.cnn.com/2002/06/20/news/companies/mandms/ June 20, 2002: 9:08 AM


M&M’s Overview

M&M’s Qualities - Product Features

The combination of qualities that sets M&M’s candies apart from all other

candies is unique and instantly recognizable. M&M’s candies are most noted for their

ability to deliver chocolate inside of a hard candy shell that allows the candies to

withstand temperatures that would melt conventional chocolates. The white stamped

“M” that became the official indicator of authenticity in 1954 (Inventor) is still an

immediate identifier for M&M lovers worldwide.

The packages and the candies are frequently modified to coincide

with all major holidays such as Halloween and Christmas, special

occasions such as weddings and baby showers, and current events such as

the Star Wars movies and NASCAR racing. Each of the modified units

includes a redesigned package and a special assortment of M&M’s colors.

With over 21 colors available today, there are sure to please any and every

M&M’s consumer; colors are shown in the image to the right.

The M&M’s packaging and website currently advertise

the option for consumer to choose custom colors and messages

on their M&M’s. Customers may have the unique candy

inscribed with up to two lines each containing up to eight

characters. This process allows consumers to feel as thought they are a

part of the creation process and helps them to feel a bond with the brand.

Various packaging sizes come in small and larger sizes to accommodate trick-or-

treaters, party throwers, and collectors alike. M&M’s are also sold in tins, dispensers,


and other collectible memorabilia. In many cases, the candy that comes with the M&M’s

collectibles is more of a complement to the product rather than the final desired product.

MasterFoods produces many varieties of M&M’s to accommodate a wide range

of consumers. Different varieties of M&M’s include: milk chocolate, peanut, peanut

butter, crispy, almond, and dark chocolate. Different sizes of M&M’s include: minis,

mega, and M-azing (candy bar version). From time to time, MasterFoods will

temporarily introduce a new variation of candy for a specific current event or

sweepstakes. There has been a strong push lately to extend the product line past standard

M&M’s that have been around for over fifty years.

MasterFoods has also extended the M&M’s brand to incorporate products that

take advantage of the M&M’s brand name and identity. M&M’s dispensers, characters,

boxes, banks, shirts, and hats are just a few examples of M&M’s memorabilia that is

available not only online, but also in toy stores, grocery stores, and dedicated M&M’s

stores.

Mars vs. Hershey - Current Competition

The chocolate industry is extremely competitive. Regarding the contest between

Mars and Hershey, the president of Hershey Chocolate, Joseph Viviano, said, "We're just

as bad as Coke and Pepsi - probably worse . . . it’s just that we don't talk about it, so

nobody pays any attention (Brenner, p. 11).” Richard

O'Connell of the Chocolate Manufacturers Association

stated, "Do you have any idea how hard it is to come up with

something new in the candy business? I don't blame the


industry for being paranoid; there's a lot at stake…there's only so much you can do with

chocolate, peanuts and caramel - if you get my drift (Brenner, p. 12).”

The two companies are bitter rivals and would love the opportunity to gain more

market share. There have been many attempts at legal

actions, but both companies generally agree to either

settle their differences out of court or simply ignore the

issue entirely. The reason for this unusual behavior is

that customers’ perceive candy companies and their

products as the embodiment of fun and happiness (Brenner, p. 14).

In addition to industry competition, M&M’s

faces direct competition on its product line. In Wal-Mart, Woodburn, OR, November 25, 2005
Top row: Hershey-ettes, bottom row: M&M’s

1954, Hershey-ettes (Product Timeline) were

introduced to directly compete and are very similar to M&M’s. They have not been very

successful and are generally only available for consumers around the Christmas season.

In a new effort to directly compete with M&M’s, Hershey has extended their

well-known Hershey Kisses brand; on November 17, 2005 Hershey’s launched a new

sales campaign (Introducing) with a new product—Hershey's Kissables. The fact that

Hershey is targeting the M&M’s market is evident from a quick review of their press

release (Introducing), the sponsorship of the 2006 NASCAR Busch Series race at

Daytona International Speedway (Hershey's Kissables), the physical qualities of the

candy—such as the choice of colors, and their merchandising efforts (More Holiday

Gifts) as seen in the picture taken at Wal-Mart.


In 2003 a new competitor to M&M’s emerged. Jelly Belly already had small

candies similar in size to M&M’s, but did not have any products in the chocolate side of

the confectioning market (New Product Updates). The Jelly Belly candy, called JBz,

were introduced to take a much closer aim at Mars’s M&M’s market, even shaping the

candy similarly like M&M’s. According to the Jelly Belly candy makers, “JBz

Chocolate Candies pair chocolate centers with candy shells with twelve delectable

flavors.” (JBz Chocolate Candies) The official flavor count,

however, is now up to twenty as Jelly Belly continues to

expand their product line. JBz candies come in many of the

same colors as M&M’s and even include a white JBz decal

similar to the M&M’s white stamp.

As more companies release products that are similar to M&M’s, it will become

increasingly difficult for Mars to continue to command the same level of market share in

the chocolate candy industry and the product has the potential to get lost in the

supermarket aisle.


Marketing Strategy

Target Market

The brand is seen as a family brand that is wholesome, fun and that everyone can

enjoy. Adults have grown up with the M&M’s brand and are able to share and enjoy it

with their kids. While M&M’s would like to appeal to a mass market, this is simply not

possible. Generally middle income families are the ones who purchase M&M’s candy.

There has been a more concrete marketing campaign with the introduction of Mega

M&M’s, M&M’s candy are trying to appeal specifically to an adult market, introducing

colors such as “come in six new hues that appeal to adults: maroon, teal, blue-gray, beige,

gold and brown (M&M’s website).”

Segmentation

There are two kinds of markets for the M&M’s brand; those who consume the

candy on a regular basis and those who consume the candy on special occasions. People

who consume the candy on a regular basis are typically children and families.

People who consume the candy on special occasions such as Halloween, Easter

and Christmas are more apt to buy M&M’s brand candy in the larger packages that come

in special holiday colors; this is what M&M’s is best known for. Middle class mothers

throwing holiday parties are in this market segment. They see M&M’s as a special treat

for the holidays, with ranging colors appropriate for each holiday.

Marketing Mix

Product
M&Ms comes in a variety of candy types, colors, sizes and that’s just the candy

itself! M&MS also has 30 licenses to promote other products such as sweatshirts, M&Ms


dispensers and plush dolls of the Spokescandies (M&M’s website). Recently, M&Ms has

allowed customers to customize their own bags of M&Ms by visiting the website and

picking out their preferred colors and even personalized inscriptions. What M&Ms is

perhaps best known for is having their candies seasonally appropriate several times a

year. Pastel colors for Easter, red and green for Christmas and orange and black for

Halloween are just a few of the color types offered for different times of the year. This

does not include the special promotions offered during other times of the year which have

included in the past: tie-dyed colors and black and white.

Price
Pricing for M&M’s is modestly priced. This is an affordable candy that everyone

can afford and enjoy. Gourmet chocolates on the other hand, which can run $30 per

pound are targeting a higher class of customer. Single serving bags are typically under

one dollar. Large bags of M&M’s range from $2-$3. To buy a customized bag of

M&M’s will be a little more expensive. This selection gives you the option to put a

customized message on your candy and the ability to pick up to two customized colors.

The price for one 8 ounce bag is $9.49, but the minimum quantity allowed is 4 bags,

making the minimum total $37.96 (M&M’s website). The upside to this is that M&M’s

does offer free shipping for your customized product.

Place
M&Ms in the distribution channel is sold at the retail level. Currently M&MS is

sold at many, if not all, food retailers throughout the U.S. and International markets. It is

a ubiquitous product that is not hard to find. Many of their branded products can be

found at these retailers as well, but the main place to find them is on the Internet at

www.M&M’s.com. M&Ms has made their products easily accessible to their consumers


to make the purchasing process less difficult. This also goes along with the fact that

M&Ms heavily promotes their products in many different advertising mediums, so it only

makes sense that their products are easy to find.

Promotion

M&MS has many different advertising mediums applied to their brand.

Television commercials, ads in magazines and promotion on their various websites are

just a few. In promoting their product, they use the Spokescandies, Red and Yellow,

along with others from time to time. Using relatively the same format in promoting their

product makes the consumer more aware that the product advertised is M&Ms and will

be more likely to buy it because of that brand awareness. One of the unique M&Ms

brand does in their promotion is include in the consumer in the decision making process.

Promotions such as voting for a new favorite color, finding a missing color continuously

makes M&Ms fresh and new to the customer and results in loyal customers.

Brand Community Relationships

Customer-Customer Relationships

The construction of the relationship between customers of M&M’s stems from a

common passion for M&M’s Brand and what it stands for. What does M&M’s stand for?

Family, wholesome fun, quirky, generations growing up with M&M’s together are the

cornerstones of America’s favorite candy, and the basis on which customer relationships

are built on. These relationships span genders, ages, cultures, and countries, and enable

people, regardless of where they come from, to relate to one another through the M&M’s

brand.


Customers have demonstrated their relationships by essentially using M&M’s as a

conversation piece. They find out that they have their love for M&M’s in common, and

can share stories about their various experiences, collections, and thoughts about the

brand. The types of bonds can be formed over seemingly arbitrary things, such as

individuals’ favorite colors of candy, the order in which they eat them or simply their

favorite variety (Almond, Peanut, Plain, etc.) can be very interesting to the die-hard

customer who thinks they have the most original M&M’s story.

Around the world there are clubs that M&M fans can join, including collectors

clubs and forums where they can interact with other who share their passion. The official

one (Collector’s Club) offers membership to avid fans who wish to meet others who

share in their interests, determine more ways to expand their collections, and enjoy their

hobbies together. This is facilitated by group get-togethers at tradeshows, picnics,

meetings, and conventions. Similar to other consumer brands, the M&M Brand has

developed a following that has created subgroups within their groups. There are regional

chapters of the club, each holding get-togethers outside of the national organization’s

annual convention which is held every year in Las Vegas, home of the M&M World

Museum. Even if it isn’t an official club chapter, members often convene locally and are

able to discuss M&M related issues and experience a sense of alliance around their

favorite pastime.

Customer-Brand Relationships

M&M consumers have been able to develop a very close bond with the M&M

brand. Through the vibrant colors, comical characters, and entertaining commercials and


promotions, M&M’s exudes an image of fun and youthfulness that can be enjoyed

regardless of age. With a brand awareness of 99% (Candies with Attitude), it goes

without saying that customers are aware of M&M’s and their products, but along with

that, they have grown to create an association with the brand that goes beyond just being

their favorite candy.

Although the signature “M” has become a trademark of the M&M’s brand; the

most recognized symbol of the brand has become their “Spokescandies,” the characters

that grace all M&M’s packaging, advertisements, and memorabilia. Red and Yellow

were the first to be introduced to public in 1954 (Candies with

Attitude), and today there are several candies representing the

brand. Each of these characters has unique personalities,

which customers can learn more about by visiting the M&M

website. Each of the characters; Red, Yellow, Blue, Green, Orange, and M&M Minis,

have their own profile on the site, along with games and picture of each.

These characters have been proven a hit with consumers. Last year the, candies

were voted the favorite mascot in America, receiving over 700,000 votes and their own

star on the Madison Avenue Walk of Fame (Sutter). As this demonstrated, the characters

are able to appeal to customers of varying demographics, whether male, female, young,

and old, etc. Consumers can likely find a character that is similar to them, and strangely

enough, relate to the fictional candies. The positive connection customers make between

the characters, the brand, and themselves develops a unique relationship with the brand

that is appealing to a wide assortment of individuals. The difference between M&M’s

and competitors, such as Hershey’s Kisses, is the ability to put a face with the brand-


name. The M&M’s Spokescandies are personas that customers can visualize, and each

has a personality of their own. This enables customers to remember the Spokescandies,

thus remembering M&M’s before other brands. This association makes customers more

apt to purchase the brand.

There is much more to the M&M website than simple biographies of their

Spokescandies. This is a fully interactive site that customers can visit to perform a

number of activities. It serves as an online vendor of candies and memorabilia, a place to

learn the history of the brand and more about the company, a news source to keep up with

what is happening in the M&M world, and fun and games site, and a place to find and

share M&M recipes. The website is there to facilitate a relationship between the

customer and the brand that they want to learn more about.

Not only does the brand relate to customers in the U.S. market, but international

customers as well. The website offers worldwide access by allowing the consumer to

choose the country they represent, and visit that specific site. There are twenty three

countries to choose from, each customized to fit the country’s language, current

promotions, pertinent news, and other cultural aspects that vary around the globe.

Establishing the often overlooked difference between consumers in different areas of the

world gives M&M’s an upper hand because they are able to appeal to an even bigger

customer base. There are many interactive areas telling stories behind M&M products,

such as the creation of the newest brainchild, Mega M&M’s. There has been tremendous

amount of effort that has gone into the creation of the website, and it is merely for the

entertainment of the customers who are interested in learning more about the brand.


In the past decade M&M’s has made an appearance in a rather unlikely place that

back in 1954, no one probably would have expected to see them; the race track. M&M’s

became the primary sponsor of NASCAR in 1998 (Tapping into New Fans), and now

America’s favorite candy and their favorite sport “have formed a partnership”. This

formation has not only been financially

beneficial, but has also informed both M&M’s

and NASCAR of an audience that will be

consumers of the products. Research has shown

that fans of NASCAR are three times more

likely to purchase products from companies that

sponsor the sport (Tapping into New Fans). Conversely, if a fan is particularly loyal to a

certain brand, they will be more likely to cheer for the driver who represents that

company. This brand association will benefit M&M’s brand enormously. NASCAR

enthusiasts who are fans of Elliot Sadler, the driver of the M&M’s car, will become more

likely to purchase the M&M’s brand, as well as current M&M’s consumers will become

bigger fans of Sadler. This has provided a mutual appeal for both parties in their attempts

to grow their firms.

As a part of their sponsorship efforts, M&M’s has developed an extensive

licensing network that creates merchandise associated with the sport. As of mid 2004,

the partnership had 21 licenses for merchandise associated with M&M’s/NASCAR

(Tapping into New Fans). This partnership has created a relationship between the

customer and the brand because it has combined two brands that are of interest to a wide

variety of consumers.


It isn’t just M&M’s/NASCAR merchandise that is licensed and marketed to

customers. M&M has a separate licensing entity that produces $170 million in sales

annually through 30 licenses that create a plethora of products sold worldwide (Candies

with Attitude). The relationship that customers have developed with the brand is

apparent in the fact that they purchase an enormous amount of merchandise in many

forms, simply to be wearing the M&M logo, or the characters.

Customer-Company Relationships

There is no doubt that MasterFoods, the company behind the M&M’s brand, has

made a continuous effort to make connections and form relationships with customers.

The customers are without question the first priority, and MasterFoods strives to meet

their wants and needs, while making the M&M experience fun for all ages. There is a

definite positive relationship between customers and the company, because the customers

feel valued and that they are a part of the organization. In order to create this image of

customer concern and attention, MasterFoods asks for an extensive amount of customer

participation in promotions, contests, and brand networks so they are able to get close to

their targets. In 1995, the company had decided that expanding the color choices of

M&M’s was a must in order to increase their desirability. They decided that the best way

to do this was to let customers choose the newest color to join the mix. Overwhelmingly,

10 million plus people made the decision that Blue would be the fresh new character in

the M&M’s brand, and he has remained since (M&M’s website).

Anyone who has visited the grocery store has seen

at least one of the promotions that M&M’s has run in


the past. In the last year and a half alone, they have endorsed several major motion

pictures, with new products emerging from each (M&M’s website), launched three new

additions to their candy brand (Dandy Candy), and have had several contests with payoffs

in the form of money, prizes, or candy. The bottom line is that the company is always

providing something to catch the customers’ eye and a way for them to get involved.

Everyone should feel as though they are a part of the company and their participation and

opinions are valued by those who run the organization.

Anyone who visits M&M’s U.S. website has the opportunity to become a “Brand

VIP”, essentially a member of the M&M and MasterFoods family. Every section of the

website that a patron visits, markets the chance to be the first to learn about upcoming

news and promotions. Upon signing up for this club, the members receive newsletters

via email and postage that offer news, promotions, and new product information that isn’t

available to the average consumer. In addition to learning about the company before

others, the newest members gain access to the official Collectors Club. It is here that

customers learn of the most recent merchandise to hit the shelves, as well as become

informed about local Collectors Events that they can attend.

The company provides this service to any M&M customers, but in exchange for

the services that it offers, the company is able to collect information on their customers.

When signing up to be a Brand VIP, the form asks not only demographic questions, but

also inquires about buying behavior and competitive patronage. Questions ask the

frequency of consumption, as well as for what purpose (i.e. snacking, entertaining, etc.),

and also how often competitors’ brands are consumed. This is an informal way of


targeting the individuals for their tastes and preferences, as well as looking into

competitive behavior.

Building relationships in this way informs customers that they are important to the

company as though they have a leg up on less loyal customers. At the same time, they

are able to collect information from the customers so they can determine the uses of the

product, and better serve unmet needs. MasterFoods and the M&M’s Brand is always

looking for ways to gain customer approval, and insure they are providing customers with

an experience that will be pleasurable and memorable for the whole family.

Another way that M&M’s is building customer relationships is by joining social

causes currently affecting certain demographics. Since 2003, MasterFoods has sold

specialty bags of M&M’s containing pink and white candies in support of breast cancer

awareness during the fall months (Who They Are). A

portion of each sale is donated directly to the Susan G.

Koman Breast Cancer Foundation in support of research

of this disease which will likely be diagnosed in over

200,000 women this year alone (Breast Cancer Statistics).

The donation made in each of the past two years has been

$250,000 and this is expected to be matched this year as well (Who They Are). This is

currently a hot topic, and especially sensitive with women. By lending their support to a

social cause, M&M’s has proven they are interested in their customer’s well being and

trying to make a difference. By showing they care, MasterFoods and M&M’s is seen as a

corporate company who cares about social issues and is doing their part to help. This has

been well received by many customers, but also met its fair share of critics. Cynics claim


it is an abomination to sell a milk chocolate candy in support of breast cancer when dairy

products in fact cause the cancer (Forum). This is not necessarily the opinion of the

general public, because all in all this has been seen as a positive step toward finding a

cure for this fatal disease.

Customer-Product Relationships

For over sixty years, people everywhere have been enjoying the small chocolate

candies that “melt in your mouth, not in your hand.” Over the years, M&M’s candies of

many varieties have become a part of American culture, changing seasonally and when

promotions or new varieties are introduced. M&M’S candy has grown from plain and

peanut varieties, to almond, peanut butter, crispy tastes and also to mini and mega sizes.

One very common appearance of M&M’s has been as a finger food at parties,

events, or just on the coffee table at someone’s house. This has been facilitated by the

rapidly changing color schemes that appear whether it’s Christmas, Easter, Valentines

Day, Independence Day, or Halloween. There are individuals who consume M&M’s

almost as a decoration, having only the current colors to represent their favorite holiday

season. They are also used as gifts and in baking, which also tend to have holiday flair to

them.

Customers often see the changing colors of M&M’s as a sign of the upcoming

seasons, and for those consumers who are highly loyal, it can evoke a feeling of

excitement because it is known that a season of entertaining friends or family is just

around the corner.


Until recently, customers had to wait for a certain time of year to see their favorite

colors, but this is not so today. M&M has followed in the footsteps of companies like

Nike and Lands End, and has added a customization option to their

candies. Now, customers are able to choose from 15 different

colors to add a message or from 21 custom colors, based on their

individual preference or their entertaining needs (Cashing in on the

new world of Me). Customizing colors and messages has broadened the possibilities for

M&M’s from the consumer standpoint, and now there are even more ways for them to

enjoy their favorite candy. From birthday parties to weddings, consumers are buying

customized candies to reflect their own personal identity with the candy and to enjoy

them to the fullest.


Future Predictions

There is no doubt that M&M’s has proved itself in the past 60 years as a popular

American brand. The future is unclear for M&M’s, but the information collected about

the current status of the brand and company can determine where they can potentially go

from here.

M&M’s relative advantage with their products is that they are continuously

creating new products. With their candy lines, they have evolved from plain and peanut

varieties to crispy, peanut butter and almond types. They have also created Mini M&MS

that are smaller than regular M&M’s and recently, M&M’s has introduced mega M&M’s

which are 55% larger than regular sized M&M’s (M&M’s website). By creating all of

these different products, M&M’s is attempting to cover every aspect of their candy

market. This is also to appeal to every kind of consumer, where they offer something for

every type of consumer and their personal preference with candy. Although it may seem

like a good idea to cover every facet of the candy arena, over time M&M’s faces such

issues such as saturation and cannibalism. Saturation will occur due to an over presence

in the market, consumers will become tired of new products being introduced and

previously when they purchased the product, they will be reluctant in the future.

Cannibalism may occur because there are so many varieties of M&M’s, consumers that

were loyal peanut fans, may become new peanut butter fans thus eating away at sales in

the peanut variety. Cannibalism will only occur when M&M’s offers too many choices

for consumers and they become confused with what product to buy and will lose loyalty

to their favorite variety.


Another factor to consider is expanding into more international products. At this

point in time, they do have a considerable presence in international markets such as Hong

Kong and Japan, but are missing some key global players such as mainland China,

Taiwan and the Pacific Islands. Potential expansion to Eastern Europe and Middle East

should be considered by M&M’s and MasterFoods, but should not expand until further

market research is done. By increasing the Asian presence they will be able to reach a

large demographic given the region’s large population and interest in American products.

Another future prediction for M&M’s Brand is following the market need for

social needs and wants. The market is currently moving towards more gourmet and

specialty chocolates for both consumption and gift-giving. M&M’s is currently not

active in this market, therefore potential diversification to provide customers with

specialty products will keep them in line with market trends. Current diet trends such as

the South Beach Diet and Atkins is leading to a growth of consumer’s requests for sugar-

free and low carb candy options. This could prove to be a big market for M&M’s if they

decide to enter this growing market segment.


Works Cited

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Appendix

DOLLAR SALES (in millions), 2004

250M&M's,
201.4
Hershey's, 186.3
200
Hershey's
150 Kisses, 123.9

Hershey's
Reese's, Nuggets,
100 York
64.7 64.4 Private Peppermint
Label,Kit Kat, Cadbury, Patty,
50 Snickers, 34.2 32.6 31.6 29.9
50.8

0


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