Hershey’s Chocolate Company Strategy and Marketing

Hershey’s Company is a biggest manufacturer of chocolate and confectionery products. In 2004, the company’s net sales reached $4.4 billion. Today, Hershey employs about 13,000 workers around the globe. The main brands are Hershey’s, Reese’s, Kit Kat, Kisses, Twizzlers, Jolly Rancher, Ice Brearers (Hershey’s Home Page 2007). As a market leader, Hershey’s is concerned to get customers to buy the product for the first time as it is by no means certain that the product will have a market. Choosing the right customers to target with the marketing support for the ‘launch’ requires an understanding of their demands and values, quality expectations and life styles. The philosophy of Hershey is to “attract and hold customers and consumers with products and service” (Hershey’s Home Page 2007). Hershey uses integrated marketing communication to reach three target groups; children, adults and seniors (Chitty et al, 2005).

Hershey’s marketing efforts to children are based on ethical principles and careful analysis of the marketing messages. The products’ ‘benefits’ derive from the features the company puts in so that ‘goods’ have features that offer benefits. In its advertising campaigns, Hershey includes educational materials and promotion of healthy life style, games and programming. Hershey’s follows strict laws and rules marketing to children under age of twelve (Fill, 2002). It takes into consideration what sort of new product it sells, a new and better way of delivering benefits for which there is an already established market. When Hershey designs a product to offer to the market it considers first what are the customer needs to be addressed. What benefits will satisfy these needs and thus what features the product design should contain so as to deliver these benefits. “Hershey has elected not to include games designed for children under the age of 12 on the Company website” (Hershey’s Home Page, 2007).

Adult audience is diverse including all ethic and race groups, both genders and different socio-economic location. Nearly every customer here is a repeat customer. The main source of new customers is maturation i.e. those that move into the market by virtue of where they are on some family or business life cycle. “Hershey’s major brands and new product initiatives appeal primarily to adults. As a result, our marketing efforts, particularly television and print advertising, are focused primarily on adult audiences” (Hershey’s Home Page, 2007). Most adult customers believe the company is ‘good to do business with’. This is essential for loyalty and as a platform for future acceptability (Fill, 2002).

Effective marketing communications with customers are essential for business success. The emphasis on communications draws attention to one of the key problems when developing promotional campaigns. Hershey conveys a particular message for an adult group. The challenge is to ensure that the message sent is interpreted as the sender intended. This simple statement belies the complexity of the task. For instance, Hershey uses the following slogans: “Gimme a break” for Kit Kat, “The great American chocolate bar” for Hershey chocolate, “Makes mouths happy.” for Twizzlers. The information conveyed in advertisements is in the form of words and symbols. It works to educate, persuade and simply to inform the adult consumers about new products and their benefits. An image is supported and created, enquiries are elicited and the functions of a product can be demonstrated. A key role of all promotion, especially advertising, is to reinforce a purchase decision i.e. to provide post-purchase reassurance (Graydon, 2003). By getting close to the intended audience Hershey is able to divine the modes and classes of promotion to which the audience is open, and which media they ‘consume’. The campaigns go out using press posters and television. The ads always feature mums and bouncy healthy teen children. The aim of ‘burst’ campaigns is, via a higher than normal share of voice, to raise awareness and understanding within the target group. Once a ‘burst’ has raised awareness, if this is not supported, it is soon forgotten as it is drowned out by the noise of competitive activity (Graydon, 2003).

Hershey develops healthy and sugar free products for senior people. Hershey spends money on research and development of healthy products for this age group. “Hershey Company … examines the ability of cocoa and chocolate consumption to improve cognitive function in older adults” (Hershey’s Home Page, 2007). Customers feel qualified to judge this aspect. Any absence of factors which go to make up the expected for them, can have a direct impact on their ability to enjoy the basic benefits from the product.

Marketing for this age group, Hershey uses the same medium as for adult group: television, the Web-site, press releases, discounts, etc. Customers are attracted to the products of Hershey by their perceptions of the value they will derive from them (Fill, 2002). They are retained by the ongoing satisfactions which they receive from their relationship with that supplier and its products. Communications have a key role in representing value and reinforcing purchase decisions. Healthy life style and benefits proposed by cocoa is the core of advertising directed to older customers. Once these customers are aware of a given product (or brand), they can be persuaded to understand its appropriateness in meeting their needs, after which they can be convinced of this superiority.

References

  1. Chitty, B., Barrker, N., & Shimp, T. (2005). Integrated Marketing Communication – First Pacific Rim Edition. South Melbourne: Thomson Learning.
  2. Fill, C. (2002). Marketing Communications. Contexts, Strategies and Applications, Financial Times/Prentice Hall: Harlow.
  3. Graydon, S. (2003). Made You Look – How Advertising Works and Why You Should Know. Toronto: Annick Press.
  4. Hershey’s Home Page. (2007). Web.