Chapter 8- Business Marketing

Hershey's is a leader in chocolate industry therefor naturally they would sell to other businesses. In order to facilitate this they have a variety of websites targeting different types of businesses. There are three different websites , ORDERS.MYHERSHEYS.COM which is to order online and is market as a 24/7 real time environment in which businesses can place and track orders. They are offered a catalog from where they can view all the products available and any additional information they may need. The second website is http://www.hersheys.com/cstore/?HG_ID=HCST001 this is for convince stores who wish to carry Hershey's candy products, which the majority of the do. It is a place where they are given helpful tips and tools in order to boost sales and how to market and display candy. The third is for something that is sometimes overlooked but a big part of Hershey's sales, vending machines. http://www.hersheys.com/vending// offers all the product line available for sale through this method. They even have advertisements for those in the vending machine business as seen below.

By selling to other businesses and taking part in business to business online exchange they are able to maximize their profits by including these potential customers.

Chapter 8 : Segmenting and Target Markets

In order to sell their products successfully they have to identify their target markets. Although Hershey's products are widely available and enjoyed by many if we take a closer look we see that they have a few segments and one of the most important onces is the segmentation of the family life cycle. Through research they have found out that mothers play a large role in the decisions in the house and introducing brand loyalty. Being aware of this is why they have a variety of commercials of mothers or families bonding over a Hershey product.

Children are of course the targets for the chocolate products but if we pay attention we see that many adults have a sweet tooth as well. This was proven by some research that adults consume over 55% of all the candy sold. Therefore by demographics they market the bite size chocolates to adults. They started out with the Hershey Kisses that is now loved by all. Recently by adding more bite size chocolates they appeal to those who are trying to be health conscious and feel that a regular chocolate bar is too much. By having bite size versions they feel as if they aren't over indulging and are also viewed more portable alternative. The adult target market is very profitable and where most of their business comes from. This is how they have managed to stay ahead of the competition.  

chapter 11- Developing and Managing Products

New Products are important to sustain growth , increase revenues and profit, and replace obsolete items. A product can be new several ways either to the world, to the market, to the producer or seller, or some combination of these. Hershey usually takes part it extending their existing product lines such as with their newest product Hershey's Air Delight bar which is based off the classic chocolate bar.

In the early to mid 2000's Hershey consistently debuted 200 new products every year according to consumer product tracker Mintel. In 2008 only 146 were debuted and the numbers dropped to 40 in 2009. Then they began to implement a tool on their website in which they ask their customers what their ideas are for new product are. This has helped them develop new products that such as Bliss and their pieces line.

Unlike their competitors such as Mars and Nestle, Hershey has fallen behind in the development of new products lines instead just like their new marketing strategies that focuses on their core brands any new products are going to be additions to top existing brands with in the company this is the strategy that has helped the company survive through out the recession. A larger part of their band history is to be innovative and its time that Hershey has a break through moment with a new innovate product. As they have done in the past with Kisses.  

Chapter 16: Integrated Marketing Communications

AIDS concept is a model that outline the process for achieving promotional goals in terms of stages of consumer involvement with the message: th acronym stands for attentions, interest, desire, and action. Hershey just like any other company puts the AIDS concept into action to promote its products such as Kisses. In their commercial for kisses they grab your attention while your waiting for your TV program to resume or a video on you tube to start.

 In commercial just like the one above, are very animated in order to keep your attention since the Hershey as a brand is already established as well as the Kisses product. It creates interest by showing a check list that one of the kisses is holding while another Hershey kisses is being produced that says delicious and it is checked off. Then they produce desire by zooming in on the one of kind checked off. Then it is deposited with a happy mom and daughter sharing some Hershey's Kisses. This is the action part in that these people have bought it and so should you which is reinforced with their slogan at the end “ Delightfully Delicious One-of -Kind Kisses”

This commercial does a good job of getting the viewers attention and creating the desire for a chocolate.  

Chapter 10- Product Concepts

Hershey's has been around since the 1900's and is now one of the  most recognized chocolate companies in the and as well as a leader here in the United States. Since its beginnings its product mix has grown significantly since they have branched out into other categories besides chocolate such as gum, mints and snacks. 


Their products can be categorized as convenience products because they are relatively inexpensive and are widely available in a variety of stores across the nation. They manufacturing company strongly believes in its branding and this has been the secret to their success in the recent years. As I have stated before their new aggressive marketing plan has been based on reintroducing its iconic brands such as Hershey's Kisses, Hershey's Bliss and Resses through new commercials and magazine ads.They use a combination of both family branding and individual branding which is important when they have so many products under one company.  This over the years has created brand loyalty which Hershey's heavily realizes on. Also they have trademarked their products such as Kisses and with such popular products they have used product line extension. This can again be seen in Kisses as there are a large variety of them available all year round such as special dark, caramel. Or sometimes for they holidays they have exclusive flavors such as this year where they include Kisses dark chocolates filled with mint truffle, Chocolates filled with Cherry Cordial Crème, and candy cane flavored Kisses. Products such as those have Hershey's stay on top.  

Chapter 18: Sales Promotion and Personal Selling

Companies can use sales promotions to attract new customers and help keep ones. Hershey’s realizes on sales promotions especially during holidays in which a lot of candy and chocolate is expected to be sold such as Halloween, Valentines Day and Easter to be the preferred choice over competitors such as Mars and Nestle. These deals are usually buy any two bags for $5 as shown in the picture below or 4 for $7.

They also take part in point of purchase display promotion to encourage the impulse buyer. Also they sometimes take part in sweepstakes such as the current S’mores fall tailgating contest, in which the ultimate prize is a new Chevy SUV. On their website they even have tab named promotions. With the aide of these promotions they hope that customers will choose them time and time again if they ever decide to purchase chocolate.

Due to the fact that there only a handful of stores named Hershey’s they don’t focus so much on personal selling as they do on promotions since most of their sales comes from connivance stores and pharmacy’s. However in the few stores that they do have such as the one in Times Square they are usually giving out samples of either brand new products or a customer favorite such as Kisses. By doing so they are interacting with the customer and drawing them into the store. They are a few sales associates who will gladly help you find that  special souvenir although most are not very aggressive due to the fact that most of the items will sell themselves. They are however knowledgeable in the different types of chocolate they carry.

Chapter 17- Advertising and Public Relations

Hershey's has been one of the top companies in the chocolate business having a diverse profile extending from Kits Kat's to Hershey's Kisses. Its current advertisement consist of a S'mores commercial using Hershey's Chocolate Bar, a pure Hershey's commercial with a mother and daughter and two commercial for their latest drop collection that promotes the Hershey's Bar now coming in bite size chocolate pieces.

Before 2008 the company was highly criticized for not investing enough on marketing causing its sales to decline behinds its main competition Mars who own Snickers and M&Ms therefore they began to implement a new strategy investing in its core brands such as Hershey's, Kiss and Resses. As a result they have seen a significant increase in their sales in those products. Since this was such a success they later expanded their campaign to include Kit Kat and Twizzlers spending over $426.4 million last year in adverting.

As a result the net income has increased by 11% overall. In 2010 they debuted the Pay Day and Hershey;'s Syrup ad's which have not had advertisements since 2001. For the current season they have focused their attention the S'mores with there slogan “ Making every occasion a S'more occasion.” This goes together with the tailgating theme due to football season. To engage the customers they are having a promotion in which they are giving away an SUV. Their other concentration is the newest line drops which has been a success mainly due to creative advertisement.  

Chapter 15- Retaling

Hershey has three specialty stores not including the one at the theme park in Hershey, Pa. The stores are in Chicago, IL , Times Square in NYC and at Niagara Falls, Ontario. In all of these stores you will find a wide variety of chocolates and souvenirs including clothing and toys. Each store has something unique to offer. The one in Times Square has an outdoor scrolling marquee sign which you can display your own message. Also you create your own  mix of candy with The Original Automatic and Gravitational Chocolate Machine featured inside the store. At the one at Niagara Falls, life-size Hershey's brand characters that roam throughout the store creating a fun and welcoming atmosphere. You can also take a picture with a Hershey's Kiss character with there background of Niagara Falls inside. An assortment of baked goods such as their famous fudge is offered at the fresh food counter at which you can also get a milkshake if you prefer. There they also offer a number of unique memorabilia such as copy's of Hershey's 1934 cookbook. The first of these store was in Chicago. At this location you can be a factory worker as you create your own mix of Hershey's products. A Hershey's Bake Shoppe is also featured inside were the Hershey-izer the singing baker brings you an assortment of baked goods. The two things that are most unique about this location is that you can celebrate an occasion there or schools can take field trips to the location.

While all the stores create its own sweet atmosphere tailored to meet their customers needs they all offer some of the same products such as tin cans and jars filled with its chocolates. They all offer a chocolate bar with customized  wrapper with your photo on it and message on it. There stores motto is " one-of-a-kind, interactive experience in sweetness." They also have three international stores.

Chapter 6 Consumer Decision Making

The Consumer Decision making process is what everyone uses when they purchase any product or service. It is important to know how this process works in order to stay in business.  Hershey chocolates rely on brand loyalty for its consumers to consume its products. This is how a costumer may go about purchasing a Hershey chocolate product.

Need Recognition

For  Hershey they try to ensure they are the first ones to cross a customer’s mind when they want a chocolate bar. They have external stimuli by being placed by the registers at most stores and their brightly colored packaging attracting the attention. Also through advertising they have tried to convince that by choosing Hershey chocolate they will have a wonderful experience.

Information search

They long display of impulse buys are filled with many sweet treats and they can easily see all their options in front of them. Hershey packaging states what type of chocolate they are offered whether its milk chocolate or special dark. The customer waiting inline can easily ask others on the line about the chocolate or simply ask their cashier what their experience has been if they are in doubt.

Evaluation of alternatives and purchase

Although there will be other options available to the customer such as Mars chocolate, the Hershey chocolate will stand out in its simple good quality chocolate. Their biggest threat will be the chocolate health bars which target the health conscious individual.  Therefore since it is reasonably priced the consumers will more than likely buy the product also it is widely available. Usually if a person picks up the chocolate bar they have already decided to buy it.

Post purchase behavior

Most of the time a person will buy the product again since they have been enjoyed the quality chocolate and has cost them very little. This is what has created the brand loyalty and is what the company relies on.

Hershey chocolates are inexpensive products that fulfill the craving for something sweet. There isn’t much though into the buying process considering it is not a product that will continue to offer benefits in the long run instead it is instant gratification.

Chapter 5- Developing a Global Vision

With exports to over 90 countries Hershey’s has taken advantage of the global markets. Hershey’s chocolate and grocery products worldwide are exported worldwide and they have licensing agreement with partners in nations such as South Korea, Japan, the Philippines and Taiwan. The following international markets also have Hershey websites Canada, Mexico, Brazil, Japan, China and Korea.

Over the past five years their international business has grown at an annual rate of about 20%. At the moment they are concentrating on strengthening their markets in India, Brazil and China.  Harris International brand equity study researched over 1,000 brands across 42 categories in 2010.  Hershey’s Kisses was named the highest rated brand that year with Hershey’s Milk Chocolate scoring number 3 and Reese’s Peanut Butter Cups number 6.

One of the reasons as to why Hershey’s Kisses are so popular around the world is because Hershey’s has tweaked and  perfected the product to serve each markets needs and seize the opportunities. One of the adjustments they have made in eh Chinese market is wrapping the Hershey Kiss in gold colored foil in order to make the product look more appealing to the consumer. Today Hershey’s is investing in its global infrastructure, and brands in order for their other products to reach such high popularity.

Chapter 4- The Marketing Environment

Hershey’s target market is not easily identified since chocolate appeals to a wide variety of people of all ages and backgrounds since chocolate products can be used as gifts and be given away for special occasions such as birthdays. Valentines day and Christmas. Also chocolate can be used for people who need quick energy.  With that being said there main targets are children and students. They purchase the Hershey’s chocolate bar as a snack. They choose the snack because it is quick easily accessible and relatively priced. Unless it is a special occasion or a part of their daily diet this is a purchase that is done impulsively. Therefore they appeal to their target market through brand recognition and quality which is reinforced in their commercials. 

Chapter 3- Ethics and Social Responsibility

Hershey’s believes on building Milton Hershey’s legacy on commitments to customers, community and children because “we provide high-quality Hershey products while conducting our business in a socially responsible and environmentally sustainable manner.”

They have Corporate Social Responsibility priorities and for goal for improvement concentrated around the following four areas:

Marketplace – engage in fair and ethical business dealings through responsible sourcing, through alignment with our customers and through our promise to our consumers.

Environment – practice environmental stewardship throughout our value chain, including product design, sourcing and efficient operations.

Workplace – foster a desirable place to work to engage employees, who contribute to our continued success.

Community – work to positively impact society and our local communities.

According to their scorecard they have improved the market place through integrity of supply by revising suppler code of conduct which can be found at http://www.thehersheycompany.com/hersheys-partners.aspx

For the environment they have many programs to conserve energy and become greener. One of these ways is in January of this year their Reese’s plant in Hershey, PA became a zero-waste- to landfill operation.

They are promoting employee health welfare in the workplace through investment in wellness programs such as Hershey’s Lifestyle Returns program. Finally for their community, in 2009 they pledged to give $1 million dollars to the Penn State Hershey’s Children’s Hospital over the course of the following 5 years. For more examples for how Hershey’s is acting responsibly visit their scorecard for Corporate Social Responsibility : http://www.thehersheycompany.com/assets/pdfs/hersheycompany/scorecard2010.pdf

Although Hershey’s claims to be socially and ethically responsible according to laborrights.org most of their cocoa is sourced West Africa, a region plagued by forced labor, human trafficking and abusive child labor. While this occurs the corporation fails to act responsibly because they lack a system in which they ensure its cocoa purchases from this region are not tainted by labor rights abuses. To make matters worse they have not been transparent with the suppliers of the cocoa in order to prove that the chocolates we all enjoy were not made under conditions involving child labor. They have fallen behind the completion not being involved with the Fair Trade Certified cocoa as only one line in 2006 included this cocoa. Meanwhile its competitors have all taken part of this including many small local companies have been offering 100% Fair trade for years now.  As a result they have launched in March 2011 CocoaLink, a mobile technology program to bring our farmer education program to cocoa farmers in Africa. Even so I believe they should do more than that such implementing on of their top sellers with Fair Trade Certified cocoa. 

Chapter 2 - Strategic Planning for Competitive Advantage

As the competition in the marketplace has increased Hershey is now required to “increase expenditures for promotions and advertising and continue to introduce and establish new products.”  As leading manufacturer of chocolate as well as its related products it sets its self apart by offering “quality” chocolate at an affordable price. In the recent years they have leveraged their classic products such as Reese’s Peanut Butter Cups and Hershey’s Kisses in order to meet their goal.

They have done so by offering a new variety such as White Reese’s Cups, Reese’s Bites and Reese’s Pieces. They have also created options for their foreign markets, for example filing them with hazel nut or marshmallows for their East and Western European customers. 

Another example is making the Hershey’s Kisses the candy choice of everyday versus being only a choice for the holiday. In order to achieve this goal they have begun to offer dark chocolate, mint flavored and even caramel filled kisses.  Their advertising campaign ties directly with their mission statement showing real people enjoying chocolate as a part of the experiences usually tying in with the current season.

By doing so they have managed to stay up front of their competitors and acquiring the fancy-front displays used to lure shoppers upon entering the store. They have also been strategically placed over the conveyer belts taking the place of the National Enquirer. This ensures they have a wide audience waiting to enjoy a little happiness. 

Hershey's Mission Statement

Today the mission statement of Hershey Food Corporation is: “Bringing sweet moments of Hershey happiness to the world every day.”

They say it summarizes their company, their people, their past and their future. Their history of producing the world’s best treats goes back more than 100 years. They take great pride in their brands and in the fun and enjoyment of their products added to the lives of their consumers.

Hershey's Brief History

The Hershey Company is the leading North American manufacturer of chocolate and non chocolate confectionaries as well as chocolate related products. They produce many well known brands such as Almond Joy, Kit Kat, Twizzlers, and of course the iconic Hershey’s Chocolate.

It all started with a man names Milton Hershey.He owned the Lancaster Caramel Company which in 1894 decided to produce chocolate as a coating to the caramels. They named the business Hershey Chocolate Company. By 1900 they had begun to produce their chocolates in many forms such as bars and in wafers. Due to mass production revolution they were able to take an item that was once considered a luxury reserved only for the wealthy affordable to all.

This was huge success causing them to quickly expand therefore creating new products such as Mr. Goodbar. Hershey’s Kiss were the first addition to the milk chocolate confection in 1907 and began to be wrapped in the silver foil in 1921. Later on in 1968 after acquiring other related companies and even expanding into other food products the company was renamed Hershey Food Corporation.  Today it is known around the world exporting to over 90 countries with net sales of 5 billion dollars according to the company. Even after all this they still remain committed to values and vision of the man who started it all.

Chapter 4- The Marketing Environment

Bobbie Brown Cosmetics is about each woman finding her individual beauty. Her cosmetics are for the fashion-conscious customer who wants professional grade makeup. Their customers range from the experienced teen to the mature woman. The companies primary target is the career oriented woman which would range from her 20's to her late 40's, who want makeup to emphasize their natural beauty. The makeup line attracts its customers with ads that have models wearing a minimal amount of makeup not the harsh, flashy looks. Their makeup is appealing to its main target market by offering products that are multi-funcional such as the Pot Rouge which serves as both a lip and check stain. Also it new shadow pallet. Shadow Options, can be used for either day or night looks or to transition form one to another by combining the neutral daytime shades with the sparkling metallic night shades. The colors for this pallet tie into the falls Moroccan inspired boho-chic look appealing to their fashion forward customer. They target their younger audience with most teen girls makeup staple, lip gloss. Their product High shimmer lip gloss offers a lot of shine with trendy colors such as the Electric violet. The makeup line tries to convey self -confidence and that "flaw" can be beautiful through their ads and overall appearance. To further educate their customers they offer makeup classes for all their different target markets. Bobbie Brown Cosmetics represents real beauty extenuates through high quality, easy to use products.

Chapter 3- Ethics and Social Responsiblity

Bobbie Brown Cosmetics is socially responsible by taking part in the organization Dress for Success.  This is an organization to help people who have had a difficult time in finding jobs and provide them with professional work clothes and help them be better prepared for the market. Here Bobbie volunteers once a month, giving makeovers to those women who are applying for jobs as well as those who have recently been hired. In 2009 the company donated 20,000 cosmetic kits to this organization world-wide. Besides volunteering her time she also makes a monetary donation of $25,000 with her QVC appearances. 

     

  The parent company Estee Lauder is also a believer in philanthropy. Their main one is the Breast Cancer Awareness Campaign which raises awareness in many ways such as distributing the pink ribbons along with informational brochures on breast health. During the month of October their companies including Bobbie Brown sell unique pink ribbon products.

Although I could not find controversies or information on lack of ethical or social responsibility on Bobbie Brown Cosmetics I did find one on another makeup line which is owned by the same parent company. MAC Cosmetics was involved in a distasteful name for their nail polishes of their September 2010 collection. The collection was in collaboration with the Rodarte fashion house and was inspired to colors and culture of Mexico. The name that caused all the controversy was Juarez, a frosty nail polish. For those of you that don’t know Juarez is a factory town in Mexico which is notorious for the raping and murdering of many of its female residents. Amelia Parry, the editor-in-chief of TheFrisky.com (a fashion blog) called it “tasteless.” She also said “Naming a secondary nail polish shade "Factory" further indicates the brand's cluelessness, as most of the women and girls who have been murdered in Juarez disappeared on their way to or from work at the town's factories."

Following this incident MAC has extended its apologies “We understand that product names in the MAC Rodarte collection have offended some of our consumers and fans. This was never our intent and we are very sorry,” In order to win back their offended customers MAC stated that they would give a portion of the proceeds to aid those women in need in Juarez and they are investigating the best way to do this. They stated they would offer more information later on.

This caused a positive response from Parry who stated there was no longer the need to boycott the brand.I believe this was a smart move on MACs part after creating such an uproar over a sensitive issue.