Marketing Strategy Of Hershey’s

By: Akash Parikh

Roll Number:18

M.COM (Management)

Marketing Strategy

• Marketing strategy is the fundamental goal of increasing sales and achieving a sustainable competitive advantage.

• Marketing strategy includes all basic, short-term, and long-term activities in the field of marketing that deals with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.

• The marketing strategy is the foundation of a marketing plan.

Marketing Concepts

• Exchange Concept

• Production Concept

• Product Concept

• Selling Concept

• Marketing Concept

• Societal Marketing Concept

• Relationship Marketing Concept

Introduction of Hershey’s

• The Hershey Company is the largest chocolate manufacturer in North America and increasingly elsewhere throughout the world.

• Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey's Chocolate World.

• It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company.

• Hershey's products are sold in over sixty countries worldwide. In addition, Hershey is a member of the World Cocoa Foundation.

• Hershey is one of the oldest chocolate companies in the United States, and an American icon for its chocolate bar. It is one of a group of companies established by Milton Hershey.

• Other companies include Hershey Trust Company, and Hershey Entertainment and Resorts Company, which runs Hershey park, a chocolate-themed amusement park, the Hershey Bears minor professional hockey team, Hersheypark Stadium and the Giant Center.

• The Hershey's Mission statement is : "Bringing sweet moments of Hershey happiness to the world every day.”

Consumer Convenience

• Hershey’s Kisses are amongst the most popular product in the brand.

• Its small bite size makes them easy snack on.

• They are also less messy and more portable than a conventional chocolate bar which can easily crack.

• They were the first addition to the milk chocolate collection following the iconic chocolate bar and have been popular since its debut in 1907.

• Also they were the first white chocolate product that was successful named Hershey’s Hugs.

• They are so popular they have their own slogan “EVERYDAY DESERVES A KISS.”

• To be appealing for the everyday consumers who have a variety of options to choose from including almond and caramel filled.

• Those looking for a treat for a holiday the kisses are dressed up in the foil matching the colors of the occasion and sometime packaged in a large heart for Valentine ’s Day.

SWOT Analysis

Internal Strengths -

• They export to 90 different countries.

• The company has a theme park.

• Has sales exceeding over four billion dollars.

• They have a cookbook with different ways to use Hershey’s Chocolate.

• They are the leader in the United States of dark and premium chocolate segments

• The social and public image of hersheys was enhanced with its contribution of the Milton Hershey school for orphans.

• Sets new standards of chocolate due to wide range of products.

• The company holds strong brand name due to largets production of pasta in USA.

• Fascilities to Hersheys enmployees.

• Code of conduct- Intergrity , honesty , respect and quality.

Weakness-

• Price inflation

• There has been a recent decline in the Asian markets.

• Chocolate is not considered a healthy snack and the population is becoming more health conscious.

• The are not a Fair Trade Company.

• Huge debt

• Expenditure upto 46%

Opportunities-

• To increase global trade even further.

• To take advantage of the holidays such as Valentine’s day.

• Expand the production of cocoa in other countries

• To produce a new edition of Hershey’s chocolates that are Fair Trade certified.

• Possibly some chocolates that are organic for the health conscious market.

• Production of cocoa in india can reduce cost of cocoa.

• Effective communication among suppliers and consumers of Hersheys.

Threats-

• Mars Company has a stronger presence internationally like in Mexico and Europe.

• There has been a reduction in their lands for crops.

• They have reduced the number of workers which then reduces the amount of production.

• Government policies and regulations make the company become more eco-friendly therefore causing them to invest more of their revenue.

• Rising prices of gas increased the overall price

• There is an increase in the number of peanut allergies.

• Developing technology

• The increase in demand of employees due to increment in living expense

Marketing Strategy

• To increase potential sales through promotional programs planned through the year especially during the holiday seasons.

• Repackage Hershey's so that it's new look will appeal to the customers considering that will be tagged as a low calorie snack.

• Continue to expand globally and have a stronger presence in foreign markets and with a special focuse in their declining Asian market.

• Promote their core brands such as Kisses through numerous TV and magazine ADS.

• To leverage existing products to new markets and consumers through the new collections such as the Pieces Collection.

Marketing Region

• Hershey products can be found at numerous locations such as drugstores, supermarkets, connivance stores, vending machines, sometimes even at discount stores and they even have specialty stores.

• The products can usually be found by the cash register and in the candy aisles.

• These stores offer moderate to low customer service. The drugstore and connivance store have medium to narrow product assortment while the full line discount stores offers a medium to broad variety.

• The supermarket and the specialty store are the ones that offer a broad selection. They have three specialty store here in the United States one is located in Chicago, the other in Niagara Falls and the other one is New York City.

• They are looking to expand globally and have opened store in Singapore, Dubai, and Shanghai.

• Hershey’s also has a theme park which I highly successful offering a wide variety of services such as creating your own candy bar and inside offer Hershey’s Bake Shoppe.

• These specialty stores are the ones that bring in the highest gross margin.

• They are big attractions to tourists in particular and offer products’ not available in the other locations. An example of this would be the store in Times Square here in NY offers Hershey’s chocolate bars with the wrapping saying NYC. They have tin cases also saying NYC and bags of assorted chocolates wrapped up with NYC landmarks. The convince store brings in a moderate to high gross margin making it the second highest for the company.

• All the others offer a lower gross margin but are still important since they rely on the impulsive buyer or the holiday season.

• In the most recent years Hershey’s has added an online store to their retailing mix. They currently do not take part in franchising or restaurants other than the one located inside the theme park. Overall they have a variety of means to sell their products to a wide range of customers.

Intergrated Marketing

• "Bubbles of Fun" This would be used to promote their brand new chocolate Air Delight which is like the classic Hershey's Milk Chocolate bar but instead of having its creamy texture. This chocolate is made up of air bubbles which provide a whole new sensation in your mouth.

• "Share Holidays Kisses" This would be used to promote the Kisses line of holiday products which include the favorite Peppermint Edition kiss which is made of white chocolate with a peppermint ribbon spiraling down.

• "Give a classic share a smile" This would be used to promote the classic Hershey's Chocolate Milk Bar which can be given during the holidays or shared with family and friends just like in their current commercials on TV. This would reinforce the smiles and joy that seems to be spread during the holidays. Smile are a sign of joy which is hopefully spread by the act of giving or receiving a Hershey chocolate bar.

• All these would be used to promote products that are classics and part of traditions just like the holidays. This is a big season for the sales of chocolates as they simple inexpensive gifts that most people like to indulge on.

Future plans

• I believe that the company is heading in the right directions in some aspects such as their increasing in marketing as a result of a new marketing campaign they began a couple of years ago. However since they have focused so much on strengthening their core brands such as Kisses,Twizzlers, and Reeses they have stopped coming out with new chocolate or candy bars. This will affect them in the long run as competitors such as Nestle and Mars are continually feeding its consumers new products. Also globally they need to become a stronger presence as they are also falling behind compared to other brands. They have received negative publicity due to unethical coca standards which may affect them unless they make a campaign to correct their image. Also expanding into the natural and organic make would be a smart move that will help them maintain a competitive advantage over the others.

Conclusion

• For Hershey’s in order to have a competitive edge they must continue to expand their line as they have been falling behind in the recent years. Their marketing plan for the recent years has been an improvement but in order to venture forward they must branch off into new markets. They should try to release an organic chocolate as this is a growing market, they can make a lasting impression by making an organic or natural version of one of their classics such as Kisses. Just like this is a trend they should keep up with trends in the industry.

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