Discuss about th Management for Contemporary Business Oganizations.
The current business scenario demands sustainable business and marketing practices from the contemporary business organizations. This is due to the reason that competition is much higher in the current market scenario and it is important for the business organizations to have innovative and sustainable marketing practices (Shamma and Hassan 2013). The more innovative and sustainable marketing activities will be initiated by the business organizations, the more will be the probability of gaining competitive advantages in the market. However, it should also be considered that all the factors in the business operation should be determined effectively prior to the initiation of the marketing activities.
Hershey’s is one of the major confectionary brands in the world based in the United States. They are having their market presence in more than 60 countries and are considered as one of the largest chocolate manufactures in the world. However, they operate in highly competitive market comprising of some other global brands along with number of local brand in different countries. Thus, they are also having the need of sustainable marketing practices in order to enhance their business potentiality in the global market along with maintaining the market position against the competition.
This report will discuss about the marketing mix strategy of Hershey’s in order to identify their major elements of marketing. In addition, the SWOT analysis will be performed to identify the positive and negative factors of Hershey’s. The sustainable business practices of Hershey’s will also be discussed and analyzed and recommendations will also be provided.
One of the major advantages for Hershey’s in terms of their product strategy is having diverse product portfolio. Currently they are having large variety of candy and chocolate ranging across different price ranges and in different shapes and sizes. According to the reports, the product portfolio of Hershey’s includes chocolate, candy, mint, gum and caramel. Moreover, there are different variants available for each of the products along with having different sizes. Thus, the product assortment for Hershey’s is huge and it is helping them in targeting large and diverse customer segments (Stark 2015). Another advantage of the product strategy of Hershey’s is that they are being able to cater to different need in different market with their diverse product portfolio. For instance, the demand for chocolates is different in the United States and Australia. With having diverse portfolio, they can effectively cater to the different market requirements.
In comparison to the rival brands, Hershey’s is having more premiums pricing in the market. One of the major reasons behind the initiation of the premium pricing by them is that majority of the products of Hershey’s is legacy and premium pricing justifies the legacy of their products (Keller 2017). Moreover, initiation of the premium pricing also helps them to cut off the intensity of the competition. This is due to the reason that majority of the rivals of Hershey’s is operating the mass market and thus charging higher price helps Hershey’s to have a completely separate market space (Davcik and Sharma 2015). Another advantage that is being gained by Hershey’s from the initiation of the premium pricing is increase in profitability. Thus, the average profitability of Hershey’s as compared to the rivals firms is more.
However, it is also to be noted that initiation of the premium pricing will also limiting the market reach and share of Hershey’s. This is due to the reason that major section of the mass market is not getting catered with having higher price point. In the global market also, premium pricing is the reason for having market share in the developing countries for Hershey’s.
Distribution and retailing of the products of Hershey’s are the major area of gaining competitiveness in the market. This is due to the reason that products of Hershey’s are available in each and every grocery store in their operating markets (Belu and Marinoiu 2014). Apart from the grocery stores, the products of Hershey’s are also available in shopping malls and different departmental stores as well as through vending machines. They are also available in the online forums also such as Amazon and eBay. Thus, the market presence of the products of Hershey’s is extensive and is targeted in reaching out to maximum number of potential customers.
Extensive promotional policies and activities are being followed by Hershey’s in reaching to maximum number of customers. Offline promotional mediums for Hershey’s include television commercials, billboards and magazine advertisements (Arapi 2014). However, one of the major points that is being followed across all promotional activities and advertisements of Hershey’s is relating happiness with their products. The major objective of their promotional activities is to communicate that happiness can be generated from using their products. Moreover, concept of happiness is more relatable with the chocolates and candies. Social media marketing is also being promoted by Hershey’s including facebook and instagram. These help them to promote relationship marketing with the customers (Ashley and Tuten 2015).
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Strengths · Wide distribution · Innovative chocolate brand · Huge product portfolio · Brand equity · Philanthropic efforts |
Weaknesses · Purchase of cocoa · Limited scope of expansion · New entrants in the market · Duplicity of its products |
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Opportunities · Expansion in the snacks segmentation · Powerful distributive networks |
Threats · High competition in the market · Decreasing margins · Health awareness · Poor supply of raw materials |
The SWOT analysis of the organization, Hershey’s has helped in identifying the different aspects of the possible opportunities and threats that are faced by the business while undertaking the activities as per the needs of the market (Besharov and Smith 2014). On the other hand, the identification of the strengths and the weaknesses of the business help in the proper management of the business functions (Alexander 2013). The wide distribution channels of the business have helped in determining the changes in the structure of its functioning as per the identification of the tastes of the segmented customers. It has helped the business in maintaining the loyalty of the customers, which resulted to a sustainable brand equity in the industry. The initiative of innovation that is undertaken by the business is dependent on the variable choice of the small segments of the customers, which has helped the business in maintaining a good brand equity (Goetsch and Davis 2014).
On the other hand, the company faces a challenge while making a purchase of the chief raw material, cocoa, which has affected the productivity of the business as per the needs of its expansion in the international markets (Bolman and Deal 2017). The low availability of cocoa affects the functioning of the business to suffice to the demand of the customers in the market, which affects the proper functioning of the business. The limited scope of expansion of the business is characterized by the micro marketing undertaken by the same (Hislop 2013). It has helped the organization in enhancing the loyalty of the customers while compromising the scope for the business expansion in the market. Barry Callebut, Cargill and Mondelez the chief competitors of the organization, belonging to the same industry, have acquired a greater position in the market through the expansion undertaken by them in their businesses. The limited scope of expansion has given rise to the acquisition of the market by the new entrants, which has affected the functioning, and the scopes of the business to maximize the market share.
SWOT of the business has also helped in delineating the opportunities of the organization in bringing forth changes in the systems and the functioning of the business as per the organizational objectives. The expansion in the snacks segment of the business will be helping the organization to make an expansion in the market as per the needs of the customers in the market. The identification of the opportunities of the organization will be helping the business to design procedures and steps to expand their product portfolio based on the needs of the customers and the preferences of the same in the respective markets. The identification of the competitors of the organization will be helping the business to undertake an analysis of the advantages that are being faced by the businesses (Brooks, Heffner and Henderson 2014). The company faces a high competition from Barry Callebut, Cargill and Mondelez and the functioning of which has affected the brand equity of Hershey’s considerably. The identification of the factors supporting the competitive advantage of the companies will be helping Hershey’s to formulate new strategies to cope up with the challenges in the market. on the other hand, the identification of the costs that are incurred by the company, which has affected the profit margins will be helping the same in minimizing the different costs. It will be helping the organization to bring in changes in the systems and the performance of the business in the market (Kajanus et al. 2012).
They follow the concept of micro marketing, which denotes that Hershey’s is having smaller target market or segment for their business operation (Layton 2015). According to the strategy of Hershey’s, they are having smaller target customers and they design their product portfolio in accordance to the tastes and preference pattern of these smaller segments (Chhabra 2013). Thus, it helps Hershey’s in having higher level of customer loyalty and satisfaction of their target segment. Though, they are having smaller target segment but their rate of customer loyalty is more compared to their competitors.
It is another innovative marketing activity practiced by Hershey’s. According to this strategy, Hershey’s launches special items during different holiday and festive seasons. These items are being designed in accordance to the mood of the particular festival. It helps Hershey’s to cater to the market effectively by offering distinctive and customized products to the customers (Manthiou 2014). Moreover, the average trend of expenditure of the customers in the festive season is more compared to other time of the year. Thus, this strategy helps Hershey’s to meet the increased demand of the customers during the festive season.
Co-creation strategy is one of the most effective and popular marketing strategies practiced by the business organizations. Hershey’s also have initiated this strategy in order to enhance the engagement of the customers. Different activities are being initiated in order to engage the customers in designing the products especially the kids are involved in the co-creation process. This helps them to have more engaged customers in place along with effectively determining the trend and requirement of the market (Yi and Gong 2013). This strategy also helps Hershey’s to launch and promote products in the market in accordance to the change in taste and preference pattern of the customers (Kuipers et al. 2014).
Thus, it can be concluded that the marketing practices of Hershey’s are sustainable as well as effective in nature. These practices help them in maintaining their distinctive position in the market and effectively competing in the intensely competitive market scenario.
The recommended actions that might be undertaken by the business is based on the evaluation of the internal and external environments of the same. This section of the report aims at identifying the recommended actions that might be undertaken by Hershey’s to bring in sustenance to its functions in a competitive market.
Conclusion
Therefore, from the above analysis it can be stated that the proper functioning of the organization is based on the identification of the different strengths and weaknesses of the business. The identification of the different factors that creates the urgency in an organization to bring in changes also helps in the decision making process. The different factors that have affected the growth of Hershey’s in the market are evident from the report. Sustenance of the organization is based on the identification of the different activities that are undertaken by the organization and the manner in which it helps in bringing in developments of the business in the market. The continuous innovation that is undertaken by the organization helps in the maintenance of the sustenance of the same in the market.
References
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