The Hershey Company – A Leading Chocolate Manufacturer In North America

History of The Hershey Company

Discuss about the Sustainable Management & Marketing for Hershey Company.

?The Hershey Company which is listed on the New York stock exchange is also known as Hershey’s. It is one of the biggest chocolate manufacturers in North America. It has its head office in Hershey, Pennsylvania, and it is a place termed as home for Hershey’s chocolate world (Hersheypa.com, 2018). It was launched by Milton S. Hershey in 1894 as an affiliate of Lancaster Caramel business (Hersheypa.com, 2018). It is one of the primitive chocolate businesses of United States. It has a unique packing and people usually recognise the chocolate from its outer cover.

• Product strategy: ?it is one of the oldest chocolate companies of United States however it has many other businesses like Hershey trust company, Hershey Park which is operated by Hershey entertainment, also has the resorts business, hockey team, chocolate themed amusement park, a stadium and a GIANT Centre. It is a popular brand offering chocolates and others sweet syrups and saucers. There are various products available with various sizes and shapes (Oliver, 2002). There has been a constant product innovation into the marketing mix which has assisted Hershey to expand in all these years. 
• Price strategy: Hershey is a Supreme brand and therefore premium charges are taken in comparison to different standard chocolates which are there in the market. The focus is on the upper middle class urban popular and foreign Travellers. The variation of prices is from $10 to $50 (Hersheysstore.com, 2018). Even though there has been no increase in pricing in the recent past, yet the demand in different SKUs have been decreased
• Place strategy: ?The initial plant of Hershey Pennsylvania started on 15 June 1963 in Ontario, Canada and the subsequent ones started in 1965 in California. In the year 2007 there was an announcement made by Hershey that the Canada and California manufacturing units would shut down in 2008 and these two had to be substituted by a fresh outlet in Mexico. In the year 2002 also there was a manufacturing plant setup in Brazil. There are various factories in Virginia, Pennsylvania, Robinson Illinois, Mexico Tennessee and various other places (Hersheysstore.com, 2018).

Hershey is available all over the world in grocery stores, drug outlets, wholesale club, supermarts, vending machines, malls, departmental stores, hospitals and various other places where chocolates are available. It can also be bought from different websites like Big Basket, eBay, Amazon etc (Cadbury, 2011). Hershey has a great distribution Network and therefore it has the capability to reach different nations all over the globe. The distribution channels of the business cover almost every major City.

• Promotion strategy: ? ?For promotion, the business does not get involved into direct marketing where direct sales promotion is carried out. However there is interactive marketing carried out for which the business has appointed Arnold for creation of completely integrated Advertising and Marketing campaigns all over the world. Arnold is recognized for brand building by various campaigns such as broadcasting, printing, designing, directs promotions and Public Relations.

There is sales promotion carried out for commercializing various holidays by providing with popular gifts. Increase in the significance of commercialized non conventional holidays and conventional holidays help the business to optimize the significance of their unique gift items (Hersheys.com, 2018). By offering the gifts through retail chains, Hershey has an opportunity to expand its sales volumes for unique gift items.

Hershey does its promotion by television advertisements, magazine advertisements, billboards and even online platforms. The main objective is to make delicious chocolate that each and every person can enjoy. Hershey’s milk booster advertisement has an aim of positioning itself as a healthy item for children who are in growing age and also as a substitute to conventional milk powders. The Hershey spreads also follow the comparative technique in the advertisement where a cute kid is displayed who plays dumb charades with his mother and the Emphasis is on the consumption of Almonds for helping children grow as well as its daily consumption in breakfast (Convenience Store News, 2018). This business had earlier attempted to create advertisements which displayed spreading happiness in the family. There is a tourist attraction location in Pennsylvania which is owned by this business and is known as Hershey’s chocolate world (Hersheysstore.com, 2018). Children and their families go to this place for spending great time and during that time there is promotion of the product carried out. At this place people can come to know how chocolate is made and they are also provided with free samples along with experience of the state of the art technology. There are different promotional acts such as trolley tours, 4D chocolate mysteries etc (Klara and Klara, 2018). The main focus is on the children therefore children can design their own Candy and can get involved in the chocolate making procedure. The other ways of promoting the products is use of Twitter, Instagram and other social media networks. There are recipes provided for cupcakes, cookies, breads and Muffin cakes from a puddings, Mousse, candies and snacks, pies and tarts, frostings and fillings etc.

• People strategy: ? ?Hershey tries to keep the workers satisfied and happy because it is believed that the workers can create great chocolates only if they are happy. For this only, in 1906 Hershey’s park was created so that its employees can have some free time for themselves (Corporate, 2018).
• Process strategy: ?The process of making chocolate, sweet sauces, syrups includes making of chocolate bars, calorie bars, peppermint Patty, buttercups and many other things which are distributed in around 60 countries in the world. It has become so popular that almost 18 million units of this product are created daily to fulfil the demands all over the world.
• Physical evidence strategy: ?Hershey is an American food business and one of the biggest chocolate manufacturing businesses all over the globe. This brand started in 1894 when Hershey cocoa was introduced and it was the initial item from the business to be sold to the general public. Even though the chocolate was something which upper class society preferred, it was made available at lesser prices so the other parts of the community could also enjoy it.

Distribution Network of The Hershey Company

The business targets upper middle class people or foreigners and lately its prices have not the risen however the weights have decreased. Since this brand fights for leadership, they also fetch new excitement to a once stale Candy Market. By the appropriate marketing mix it has improved its sales and created interest in its new items. The focus has been on the kids and now it is shifting its focus to grownups and healthy items as well. The key to this business comeback was the way it targeted on bigger regions of customers (confectionerynews.com, 2018). It introduced successful new items and loaded people with great advertisements. The brilliant marketing strategy of Hershey has made it captured the market again. The marketing strategy focuses majorly on kids, athletes and students… This product has faced hi competition and therefore it has forced the business to boost the promotion and advertisement campaigns. Hershey also partnered with coke and the focus was on items attributes like health benefits, energy providing bar etc. There has been a unique packing for every design and every size of product. The business also focuses more on sales promotion particularly in holidays when kids consume more of chocolates and candies.

?The other three are the key competitors of the business and these offer less diabetic goods than Hershey. This is the drawback for the brand (Fox News, 2018). Therefore with a straw back it is difficult to compete with all the three brands collectively. These three brands do not change their prices for geographical causes however for Hershey the price of the goods altar and therefore the demand of the brand fall. The shifting price of the goods is the key threat which has to be resolved by the business so that it can complete with other three brands (The Hindu, 2018).

?The swot analysis has been carried out for comparing Hershey with Barry Callebaut, Cargill and Mondelez. ?This section explains the strengths, weaknesses, Opportunities and threats of Hershey with respect to its position in the market.

Strengths	Weaknesses
Hershey	Other 3 competitors	Hershey	Other 3 competitors
It was the first business to start chocolate production regeneration. There has been a toll free number given for the students and professors who want to get extra information regarding the company and therefore this kind of assistance makes this business much cooperative than the other three businesses.	Others are following its trend No other business offers such a unique strategy	More long run debts for Hershey It has the least share that is around 10% only	Others don’t have long run debts Share is higher than Hershey
Opportunities	Threats
Hershey	Other 3 competitors	Hershey	Other 3 competitors
More countries recognize brand name due to global exposure.	Other 3 brands still need recognition	Criticism for inappropriate strategy to acquire coco	No such criticism

?The business has set up the Milton Hershey School for orphan boys so that the brand image is enhanced and social and environment responsibility is given significance (Business Insider, 2018).

• It was the first business to start chocolate production regeneration.
• It has a great brand name and brand image as it has also turned out to be the biggest manufacturer of Pasta.
• There is diversification of goods such as chocolate.
• There are various industrial segments on which the business focuses like Resorts, restaurants, entertainment and commercial segment therefore this name is easily known indifferent market areas.
• there has been a toll free number given for the students and professors who want to get extra information regarding the company and therefore this kind of assistance makes this business much cooperative than the other three businesses.
• Its facilities are planned to involve schools, parks, housing for workers so that the workers state contended while working with Hershey’s.

• ?In comparison to other 3 businesses there are more long run debts for Hershey.
• Since the business is getting into various geographical areas therefore there has to be a lot of work done towards company control.
• There has been a tremendous amount of increase in advertising cost that is by 46% (Lightner, 2018).
• Within the industry of chocolate confectionery all over the world, the business has the least share that is around 10% only.
• Since there has been rise in the prices of cocoa beans there for the rise in price of items sold by Hershey can decrease the consumer purchases to a great extent (HuffPost India, 2018).

• ?Since the clients have changing preferences and tastes so there are chances of creating more and more varieties.
• Dark chocolate is served by the business for health benefits.
• There has been involvement into International Cocoa Initiative Foundation for eliminating child labour laws for African Nations.
• Efficiency can be improved in terms of distribution.
• The business can exploit it communicating power with both the suppliers and the clients.
• By making environmental friendly goods, Hershey can set up its repute in the society.
• There are new areas to be explored for Cocoa like India. ?By producing cocoa in different areas or different nations at lower cost, the ultimate cost of the final product can be reduced (Adageindia.in, 2018).
• Since there has been a rise in the world by trade therefore many diverse market areas can be explored by the company (Sherwell, 2018).
• Strong customer loyalty can be exploited by Hershey.
• The key competitors are Mondelez, Barry Callebaut, Cargill, Nestle, Mars and cadburys.

• ?Since there has been more concern regarding rising diabetes in people therefore the demand for the product has decreased.
• The community anticipates greater environmental concerns before the settlement of treatment facility by Hershey is will lead to higher cost.
• The best price for chocolate raw materials has been rising as per various geographical locations (Marketrealist.com, 2018).
• There has been inadequate Government support in developing Nations.
• The cost of Manufacturing Technology has increased making the profit margins lower.
• There has been constant increase in prices of sugar and milk.
• There has been constant rise in the minimum wages of workers for upcoming years.
• There are lesser agricultural regions as these regions are you place for setting up factory and buildings.
• The chocolate ingredients cultivation gets interrupted because of natural disasters (McGinnes, 2018).
• Since the business is expanded all over the world therefore rise in fluctuation of exchange rates also affects the business.
• Since there has been a rise in the living expenditures of workers therefore their demands have also been rising.
• There has been a criticism from different segments of community with respect to inadequate Strategies for purchasing coco.

?Even though the above strategy for the business has been useful still there can be a hobby Centre set up by the business for each and every age of individuals where people can create various designs of chocolates. This strategy can be very expensive however it will help the business to enhance its public image. It is also suggested that the factories are set up in areas which are near to cocoa producing region for reduction of transport cost. Other three businesses have been producing beverages similarly Hershey can also set up some drink beverages. Again this strategy can also be expensive however it can be useful and for this the business will have to purchase various machineries and skilled workers as a part of the strategy Hershey has to maintain its focus on the worldwide Markets and expand its presence in various parts of the world (Apprentice, 2018). In the areas where there is limited presence integration into every country’s culture is important.

Marketing Strategies of The Hershey Company

The business must look forward to offer latest chocolate flavoured coffee items in supermarts and coffee outlets like Joe Mugs and Starbucks (Philly.com, 2018). Many clients appreciate unique tastes and coffee items and prefer to buy from exclusive coffee outlets. Since there is a big name associated with the brand therefore new segments and new customers can be explored. There is an opportunity for the business to get along with coffee manufacturing industry and other food segments.

?The business can also bring various kinds of gum items, chocolates so that is can expand its market share for shop it is also advised that the production capacity of chocolates and candies can be increased. There have to be new and latest channels of distribution added to the business so that the sales get enhanced. In order to stay ahead of the competition, the business has to offer better customer servicing.

Conclusion

?The marketing strategy along with the positioning of the business has been discussed in the given report. It has also critically evaluate it the strategy of the business, which has anyways been successful, still there have been certain recommendations provided for improvement of the market share of Hershey.  ?

Since the business is one of the biggest brands of chocolate producers in United States, it has to apply a robust marketing mix strategy for maintaining and expanding its market share. There are many other competitors in the market which focus on capturing the major share and therefore constant efforts have to be made by Hershey to survive and expand. With the global expansion, the changes in the marketing mix have to be constantly made with respect to changing environment in which the business operates. This report elaborates the pricing, advertising and distributing strategies supplied by the business and also provides with the recommendations for expanding the visibility of the brand.

Reference

Adageindia.in. (2018). Ad Age Homepage – Ad Age. [online] Available at: https://www.adageindia.in/marketing/cmo-strategy/hersheys-blonde-ambition/articleshow/62442197.cms [Accessed 19 Apr. 2018].

Apprentice, B. (2018). Hershey: America’s Sweetheart?. Seeking Alpha [online]. Available at: https://seekingalpha.com/article/4070497-hershey-americas-sweetheart [Accessed 19 Apr. 2018].

Business Insider. (2018). Why British And American Chocolate Taste Different. [online] Available at: https://www.businessinsider.in/Why-British-And-American-Chocolate-Taste-Different/articleshow/46034501.cms [Accessed 19 Apr. 2018].

Cadbury, D. (2011). Chocolate wars. Bath: Windsor/Paragon.

Confectionerynews.com. (2018). The kings of confectionery: Mars and Hershey level pegging in 2015 Harris Poll. [online] Available at: https://www.confectionerynews.com/Article/2015/03/31/Top-US-chocolate-and-candy-brands-2015 [Accessed 19 Apr. 2018].

Convenience Store News. (2018). New Advertising Strategy For Hershey. [online] Available at: https://csnews.com/new-advertising-strategy-hershey [Accessed 19 Apr. 2018].

Corporate. (2018). Global Locations. [online] Available at: https://www.thehersheycompany.com/en_us/this-is-hershey/global-locations.html [Accessed 19 Apr. 2018].

Fox News. (2018). America’s favorite chocolate candies. [online] Available at: https://www.foxnews.com/food-drink/2015/05/19/americas-favorite-chocolate-candies.html [Accessed 19 Apr. 2018].

Hersheys.com. (2018). HERSHEY’S Candy & Recipes – Introducing HERSHEY’S GOLD. [online] Available at: https://www.hersheys.com/en_us/home.html [Accessed 19 Apr. 2018].

Hersheypa.com. (2018). About Us | Hershey, PA. [online] Available at: https://www.hersheypa.com/about-hershey/ [Accessed 19 Apr. 2018].

Hersheysstore.com. (2018). HERSHEY’S. [online] Available at: https://www.hersheysstore.com/ [Accessed 19 Apr. 2018].

Klara, R. and Klara, R. (2018). A Behind-the-Scenes Look at How Hershey’s Gets Ready for Halloween. [online] Adweek.com. Available at: https://www.adweek.com/brand-marketing/a-behind-the-scenes-look-at-how-hersheys-gets-ready-for-halloween/ [Accessed 19 Apr. 2018].

HuffPost India. (2018). 4 Ways To Hack Hershey’s Cadbury Chocolate Ban. [online] Available at: https://www.huffingtonpost.in/entry/how-to-buy-cadburys-online_n_6736260 [Accessed 19 Apr. 2018].

Lightner, T. (2018). Digital Business Automation Helps Keep Hershey Chocolate Lovers Supplied via @BMCSoftware. [online] Bmc.com. Available at: https://www.bmc.com/blogs/digital-business-automation-helps-keep-hershey-chocolate-lovers-supplied/ [Accessed 19 Apr. 2018].

Marketrealist.com. (2018). Market Realist. [online] Available at: https://marketrealist.com/2015/10/hershey-marketing-strategies-initiatives [Accessed 19 Apr. 2018].

McGinnes, M. (2018). Kellogg, Hershey’s, Hormel and Post Talk Strategy in Hopes of Growth | Project NOSH. [online] Project NOSH. Available at: https://www.projectnosh.com/news/2017/kellogg-hersheys-hormel-post-talk-strategy-hopes-growth [Accessed 19 Apr. 2018].

Oliver, R. (2002). Real?Time Strategy. Journal of Business Strategy, 23(1), pp.6-8.

Philly.com. (2018). Hershey to retrench its international business, warns of low sales growth – Philly. [online] Available at: https://www.philly.com/philly/business/New-Hershey-CEO-says-chocolate-will-broaden-its-product-line-to-104B-snack-sector.html [Accessed 19 Apr. 2018].

Sherwell, P. (2018). US chocolate giant Hershey goes to war over imported British sweets. [online] Telegraph.co.uk. Available at: https://www.telegraph.co.uk/news/worldnews/northamerica/usa/11366162/US-chocolate-giant-Hershey-goes-to-war-over-imported-British-sweets.html [Accessed 19 Apr. 2018].

The Hindu. (2018). Urban focus helps Hershey to turn the tide. [online] Available at: https://www.thehindu.com/business/Industry/urban-focus-helps-hershey-to-turn-the-tide/article19797587.ece [Accessed 19 Apr. 2018].