The Hershey Company’s Product Marketing Plan

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Company Profile

The Hershey Company, commonly known as Hershey’s, is a chocolate manufacturer established in 1894. It started as a candy shop in Philadelphia, Pennsylvania, where the founder, Milton S. Hershey, spent several years running the shop and partnering with different confectioners to perfect his culinary skills and invent new recipes. After several failed attempts to create a chain, Hershey returned to his hometown in Pennsylvania, which is named after him today, and invented Hershey’s Kisses—the product that became a hit and made its creator successful.

Today, Hershey’s is a market giant. It is currently ranked number 362 on the Fortune 500 List with 7.387 billion USD of revenues. The company employs about 15,000 people, operates ten plants in the United States, Mexico, and Brazil, and sells its chocolate goods in more than 60 countries across the globe. Hershey’s performance has been a reason for concerns from analysts within recent years, but currently, the company is expected to perform normally without dramatic declines in upcoming years. Hershey’s is involved in various kinds of charity, which contributes to its positive image on the market. However, some criticism has been faced; particularly, from human rights activists who protested against Hershey’s alleged purchasing of cocoa from vendors who had not guaranteed the labor exploitation-free origin of beans.

5-Year Financial Overview

At the end of Yr 2016 2015 2014 2013 2012
Stock Price $ 103.43 $ 89.27 $ 105.27 $ 96.28 $ 71.44
Revenue $ 5.469 B $ 7.386 B $ 7.421 B $ 7.146 B $ 6.644 B
Profits $ 512.951 M $ 846.912 M $ 820.470 M $ 660.931 M
Prof Margin, % 6.94 11.41 11.48 9.95
Growth Rate, % -39.43 3.22 24.14 5.08

Current Ratio: 0.83 (Current Assets / Current Liabilities; $ 1.847 B / $ 2.218 B)

Asset Turnover: 1.02 (Revenue / Average Total Assets; $ 5.469 B / $ 5.344 B)

ROA: 9.6 % (Net Income / Average Total Assets; $ 512.951 M / $ 5.344 B)

Current Market Situation: Market Description

Hershey’s operates in the sweet goods industry, producing mostly chocolate-based products. For such an industry, it is particularly challenging to define its customers in terms of demographic, social, cultural, or other characteristics because virtually anyone, regardless of his or her background, maybe a sweet tooth or, on the contrary, not a big fan of sweets and candies. At the same time, the industry is intensive and involves a nondecreasing degree of competition. The reason is that, despite the advancement of technologies and the changes in many markets, many people are still likely to enjoy a candy bar or chocolate. From this perspective, the 20th century has not essentially changed the business in which Hershey’s has been for more than 120 years. Hershey’s has a competitive advantage due to its well-established image and the fame of some of its products, such as Hershey’s Kisses. The company satisfies the needs of its customers by offering a wide variety of goods, classic and new ones, with different flavors but a recognizable taste of Hershey’s chocolate.

An important aspect of the market description is the segmentation-targeting-positioning (STP) marketing analysis. Segmentation means dividing potential consumers into groups based on certain relevant characteristics, such as demographic, geographic, behavioral, and so on. Targeting means determining how certain identified segments can be reached, attracted, and satisfied. Positioning means marketing certain products or services to customers in a way that is aimed at targeted segments. As indicated above, Hershey’s products are such that they can be demanded by customers from significantly different backgrounds and segments. However, it does not mean that the company does not employ STP. For example, Hershey’s tends to target younger audiences, which is seen in its marketing activities.

Product Review

The product line selected for this marketing plan is Hershey’s shareable, i.e., sweet goods sold in packages of several bite-sized morsels meant to be shared in a company. These include:

  • Hershey’s Nuggets Milk Chocolates
    • 12-ounce bag
    • 4 pieces
    • 210 calories
    • 8 g saturated fat
    • 23 g sugar
    • 3 g proteins
  • Hershey’s Nuggets Special Dark Chocolates with Almonds
    • 12-ounce bag
    • 4 pieces
    • 190 calories
    • 6 g saturated fat
    • 17 g sugar
    • 3 g proteins
  • Hershey’s Milk Chocolate Drops
    • 8-ounce pouch
    • 13 pieces
    • 200 calories
    • 8 g saturated fat
    • 22 g sugar
    • 3 g proteins
  • Hershey’s Cookies ‘n’ Crème Drops
    • 8-ounce pouch
    • 14 pieces
    • 210 calories
    • 7 g saturated fat
    • 20 g sugar
    • 2 g proteins
  • Hershey’s Miniatures Assortment
    • 12-ounce bag
    • 5 pieces
    • 210 calories
    • 7 g saturated fat
    • 22 g sugar
    • 3 g proteins
  • Hershey’s Caramels in Dark Chocolate
    • 7.2-ounce stand-up bad
    • 3 pieces
    • 210 calories
    • 6 g saturated fat
    • 24 g sugar
    • 1 g proteins

Competitive Review

Competitor Brand of product Features
Cadbury Marvellous Mix-Ups with Oreo
  • shareable(per 100 g:)
  • 505 calories
  • 13.5 g saturated fat
  • 51 g sugar
  • 5.7 g protein
Godiva Wrapped Caramel Nut Brownie Truffles
  • shareable(about 20 pieces)
  • 190 calories
  • 6 g saturated fat
  • 17 g sugar
  • 1 g protein
Ferrero Rocher Family Box with 16 pieces
  • shareable(per 3 pieces, 38 g)
  • 220 calories
  • 5 g saturated fat
  • 15 g sugar
  • 3 g protein
M&M’s M&M’s Milk Chocolate
  • shareable(per 1 bag, 47.9 g)
  • 240 calories
  • 6 g saturated fat
  • 30 g sugar
  • 2 g protein

5Ps marketing analysis of competitors:

  • Product: All presented products are sweet shareable chocolate snacks.
  • Price: Price ranges of all presented products are comparable, although Ferrero Rocher can be considered as a more expensive solution to the same needs of customers as those pursued by Hershey’s, while M&M’s can be considered as a cheaper one.
  • Place: All presented goods can be bought in the same places, i.e., customers may find themselves in a store choosing among Hershey’s and its four competitors listed above.
  • Promotion: All presented goods are successfully marketed through various media, including the Internet. Similar to Hershey’s, some of them appeal to customers through charity and corporate social responsibility activities.
  • Positioning: There are significant differences in positioning among the competitors. For example, Ferrero positions its products as elegant and mainly suitable for being given to someone as gifts. In contrast to this, M&M’s positions its product as a quick snack for urban youths. Hershey’s should take into consideration these and other examples of its competitors’ positioning.

Channels and Logistics Review

Hershey’s goods, including the products selected for this marketing plan, are delivered to customers via the following channels:

  • agents,
  • wholesalers,
  • retailers.
  • online
  • direct (via Hershey’s web store)
  • indirect (via retailers’ websites).

Distribution channels are currently considered sufficient.

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