1. What brand development strategy is Mars undertaking?

2. Assume the company expects to sell 300 million ounces of M&M Premiums within the first year after introduction but expects that half of those sales will come from buyers who would normally purchase M&M regular candies (that is, cannibalized sales). Assuming the sales of regular M&M candies are normally 1 billion ounces per year and that the company will incur an increase in fixed costs of $5 million during the first year of production for M&M Premiums, will the new product be profitable for the company? Refer to the discussion of cannibalization in Appendix 2: Marketing by the Numbers for an explanation regarding how to conduct this analysis.

Mars, maker of the famous M&M’s candy brand, recently introduced M&M Premiums. The new candies include flavors such as mint chocolate, mocha, chocolate almond, and raspberryalmond with white chocolate. They are wrapped in iridescent colors and sold in reclosable cartons. Mars also plans new offerings with its Snickers and Dove brands. Although the new M&M Premiums will garner a higher wholesale price for the company ($0.48 per ounce for the new product versus $0.30 per ounce for the original product), they also come with higher variable costs ($0.35 per ounce for the new product versus $0.15 per ounce for the original product)