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Final Book (1)

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Final Book (1)

  1. 1. HERSHEY’S S’MORESMACKERS
  2. 2. TABLE OF CONTENTS: Situational Analysis Executive Summary.................................................................1 Introduction...........................................................................2 Industry Analysis...................................................................3 Company Analysis (SWOT)........................................................5 Internal Analysis..............................................................6 External Analysis.............................................................8 Competition............................................................................9 Nabisco..........................................................................10 Keebler...........................................................................13 Objectives for the New Product Plan..........................................16 Segmenting, Targeting, and Positioning.......................................17 Marketing Mix Product Decisions...................................................................19 Price Decisions.......................................................................21 Place Decisions......................................................................24 Promotion Decisions...............................................................27 Attack and Defense Strategy....................................................32 Summary/ Conclusion...........................................................34 References...........................................................................35 Appendix A...........................................................................36 Appendix B...........................................................................37
  3. 3. Situational analysis Executive Summary: Product: The Hershey Company (hereafter written as Hershey), is a global confectionery leader known for chocolate, sweets, mints, beverages and other snacks. Their mission is to bring sweet moments of Hershey happiness to the world every day. To follow through with Hershey’s mission we present S’moreSmackers, a classic twist to one of America’s favorite outdoor snacks. Market: S’moresmackers will be provided to our consumers as a quick-fix for a camping classic. This product eliminates the need for purchasing multiple products and having a heating mechanism. It will be marketed to Hershey’s chocolate-craving snack lovers. The product will be positioned as a high quality, grab and go snack food item. Promotion: S’moresmackers promotion plan is not incredibly different from common promotion practices for most snack foods, however, we will be able to take advantage of the ability to “show off” the product to potential consumers, and pique the interest of the public with an advertising campaign and print ads. Distribution: Distribution will be executed in four stages. We will first roll out the S’moreSmackers product at the eight college campuses nationwide that have both the coolest climate as to make a hot snack more appetizing, and a large, famous, high-attendance football program. The colleges are Michigan State, Oklahoma University, Oregon, Colorado State, Ohio State, Mizzou, Stanford, and Notre Dame. Stage 2 distribution executes intensive distribution across the largest metropolitan areas near these universities, which are Denver, Boston, Portland, Seattle, Cincinatti, Chicago. Stage 3 deploys regional distribution to first the Northwest, then Central Mountain region, and finally North Midwest. Stage 4 distribution is the national rollout, which will arrive in all regions of the continental US not covered in Stage 3. Overall: Hershey’s well known reputation paired with the already lovable s’more snack will practically sell itself! This snack will fall right into place with the other Hershey products and will fill a need for a quick snack you can take on the go. 1 Situational analysis Introduction: Introducing Hershey’s S’moreSmackers: a classic product redesigned for our consumers’ convenience. This product is a prepackaged s’more, when you smack the packaging the s’more automatically heats to the perfect temperature. This takes away the hassle of needing a fire or heating mechanism to create the perfect s’more. This also eliminates the need to purchase the three required products, with S’moreSmackers they’re all wrapped in one. The s’more has a long history; the first recipe was printed in a 1927 Girl Scouts handbook. Since their debut they have become a campfire necessity. S’mores are loved across the world; however, their difficulty to make has made them an occasional snack. Hershey’s has created a product that you can grab and go. The S’moreSmacker will be sold in bulk at grocery stores, they will also be made to sell in individual packages in gas stations, allowing this to be an everyday snack, similar to little Debbie snacks and candy bars. 2
  4. 4. Situational analysis Industry Analysis: Hershey’s is a well-known global brand. It is the largest manufacturer of both chocolate and non-chocolate confections in North America. There are three categories Hershey’s products fall into. These categories are premium products, refreshment products, and pantry items. Some product examples for Hershey’s include baking-chocolate, chocolate milk, ice cream toppings, snacks, and major candy brands. Hershey has over 80 brands that currently operate under its leadership. Among some of the more famous ones, we have Hershey’s Kisses, Kit Kat, Reese’s, Twizzlers, Reese’s Pieces, Almond Joys, Mounds and much more. Hershey’s has operations in Europe, the Middle East, Asia, Africa, North America, South America, and markets products in over 70 countries. We’re going to enter our S’moreSmackers product into the United States Cookie and Candy Industry. The easiness of entry into this market is based on Hershey’s previous successes in the same industry. The nature of demand for our product in the snack food industry is driven by the modern consumer’s need for a quick, easy, and convenient snack. This snack satisfies the craving of a s’more without the campfire. Our product is know, but also recognized as 3 separate products (graham crackers, chocolate bar, and marshmallows). Therefore, it’s thrown right into the growth stage of the product life cycle. 3 Situational analysis Industry Analysis: In terms of competition, our top challengers in the Cookie and Candy industry include United Biscuits Holdings PLC, Grupo Gamesa, Hershey Corp, Nabisco, Arcor Do Brasil, and Keebler. Although we have 3 international competitors, we only need to keep track of Nabisco and Keebler, our US competitors, as the S’moreSmackers product will be released in the United States only. Currently, Hershey Chocolate & Confectionery Corp. leads the U.S. Cookie and Cracker Industry. Second, is Nabisco Biscuit Co. and then Keebler. According to a First Research report, the U.S. cookie and cracker manufacturing industry was worth $11 billion in 2012, and is expected to continue to increase in the next few years. 4
  5. 5. Situational analysis Hershey (SWOT): The Hershey Company is a key player in the cookie and candy industry, and leads by these values: “We are a global and diverse team, operating with integrity, working together, determined to make a difference.” The Hershey mission is also key to success which is, “Bringing sweet moments of Hershey happiness to the world every day.” The following table is an analysis of internal strengths and weaknesses, as well as external opportunities and threats to the Hershey’s Company. 5 Situational analysis Strengths: Both competitive advantages and weaknesses for Hershey are very important to the company’s internal success. Competitive advantages (strengths) include: Strong product portfolio, license agreements, and strengthening financial performance. Strong Portfolio Performance Hershey’s has a strong product portfolio with products marketed in 70 countries under 80 different brands. These products come in many different forms; from candy bars, to packaged and boxed items. License Agreement License agreements are made with various companies in order to use trademarks to manufacture, market and distribute specific types of products. For example, Hershey’s has a license agreement with Cadbury Ireland Limited and affiliates in order to market Cadbury and Carmello brands in the United States. License agreements are very important to the business and can help to generate additional revenue. Strong Financial Performance The company’s financial performance has strengthened. Net sales have increased by 7.6% since FY 2013 and the sales volume increased by 7.8%. The operating margin of the company also increased In FY 2013 by 2%. This increase can be credited to efficient cost management of the company. When a company strengthens financial performance, this increases investor confidence in the company and in turn permits it to continue on with future growth plans. 6
  6. 6. Situational analysis Weaknesses: Dependence on a Few Customers Hershey’s has a dependence on few customers such as McLane Company, Inc and Wal-Mart Stores, Inc. This may not seem like a big deal, however, the company may not be able to find alternatives to sell their products in a timely manner. Legal Proceedings Legal proceedings may not only have negative impact on company’s financial state, but also the brand of the company. If a lawsuit affects the company negatively, this could lead to penalties or closure of company operations and the product. Opportunities: Increase of Global Food Consumption/ Growing Confectionary Market With an increase of world-wide food consumption and a growing confectionary market, this would in turn increase the demand for what the company offers. New Strategic Initiatives New strategic initiatives could include tapping into a new market or starting a new research and development team in a new region. These initiatives provide potential growth and sales for the company. 2 7 Situational analysis Threats: Prices of Raw Materials Increased prices of raw materials may affect manufacturing of products. For example, Hershey may import raw materials from Brazil. If these prices of these products increase, this will in turn affect the average price of the products on store shelves. Intense Competition Hershey’s operates in a highly competitive market and it is very important to distinguish your company’s brand. If there are new companies entering into the market, this may have a negative impact on your own company’s operations. Strict Regulations Strict regulations in reference to the product may be inconvenient to follow. For example, the Federal Food, Drug and Cosmetic Act (FDA) controls many regulations in the United States. There may be costs or fines associated to different rules and regulations and may affect the company’s brand image. 8
  7. 7. Situational analysis Competition: S’moreSmackers provides a quick and easy fix to your s’mores craving, without the campfire. What makes our product unique to competition, is it delivers a convenient product in one package; no hassle navigating through the busy grocery store and no mess to clean up. Our product can easily be marketed to both children and adults alike! The graphs below depict the top 3 companies in the Cookie and Cracker Industry, in terms of revenue. Although the leading competitors are international companies, we are focusing on the top U.S. companies in the cookie and cracker industry: Nabisco and Keebler, due to S’moreSmackers being a solely U.S. product. The following tables and information delves deeper into the competitors’ SWOT analysis and description of the companies. 9 Situational analysis Nabisco (Kraft) SWOT: Nabisco is a well-known brand in the cookie and cracker industry. The company was established in 1898 as The National Biscuit Company. It is now better known as Nabisco. Nabisco is a parent company of Kraft Foods, also known as, Kraft-Heinz. Nabisco is known for many popular cookie and cracker brands such as: Oreo, belVita, HoneyMaid, Chips Ahoy, Wheat Thins, Triscuit, Cheese Nips, Premium (saltines), Fig Newtons, Nutter Butter, Teddy Grahams, Lorna Doone and much more. The following table is the SWOT Analysis of the parent company Mondelez Intl, which includes key findings relatable to our current market competition. (Britannica, 2007) 10
  8. 8. Situational analysis Strengths: Dominant Brands Mondelez Intl is known for it’s very extensive list of dominant brands in many food categories. There are over 53 brands in Mondelez’s impressive product portfolio. Mondelez does a great job at adapting products when marketing to new regions. For example, a new flavor in Asia could be wasabi or lychee fruit cream Oreo! Attractive Categories Although packaged and processed foods industry have seen a slight decline with recent healthy food trends, the snack and cookie/cracker industry are very fast growing categories. Americans buy on impulse and cravings, which helps drive demand for snacks, cookies, and crackers. Weaknesses: Uneven Execution Mondelez has seen a few hiccups since expanding into global markets. In India and the Asian regions, Mondelez was hindered by capacity constraints. While pricing was a big issue in both Russia and Brazil. 11 Situational analysis Opportunities: Emerging Markets Mondelez has expanded into global operations, investing more than 3.4 million dollars into Brazil, Russia, India, and China (Also known as BRIC Nations). These investments should convert into increased sales in these regions. Many companies are choosing to invest into the BRIC Nations because they make up about 15% of sales revenue mix. Cost Cutting To cut costs and save the company money, Mondelez has been look- ing into controlling overhead expenses and excelling efficiencies. Another change has come from a redesign in the supply chain which will potentially help the company save money in the long run. Threats: Low-Cost Rivals Price dropping from competitors is a common concern for large companies. However, if the company states up to date on latest technology, continues to innovate and improves advertising, they will have no problem. 12
  9. 9. Situational analysis Keebler (Kellogg co.) SWOT: Keebler is known as being one of the largest cookie and cracker manufacturers in the United States. The company was established in Philadelphia Pennsylvania in 1853. The company is known for many well-known brands such as: Cheez-it, Chips Deluxe, Club Crackers, E.L Fudge Cookies, Famous Amos, Fudge Shop Cookies, Vienna Fingers, Town House Crackers, Wheatables, Sandie’s Shortbread, Zesta Crackers. Thefollowing table is the SWOT Analysis of the parent company of Keebler, the Kellogg Co., and includes key findings relatable to our current market competition. 13 Situational analysis Strengths: Strong Brand Portfolio Kellogg is known for a very diverse and extensive brand portfolio. Kellogg markets products in the cereal, snack, candy, and the cookie and cracker industry. Forbes recognized the company as one of the “World’s Most Powerful Brands” in 2013. Weaknesses: Reliance on Limited Customers Similar to Hershey, Kellogg also relies on limited customers. Although there is a very large consumer base, depending on a few customers may hinder operations if they are unable to find alternative customers in short time spans. High Dependence on the US Market Although Kellogg has expanded into global markets, it is still depended on the U.S. for sales as it generates the most revenue. This may pose as a problem in tough economic conditions. 14
  10. 10. Situational analysis Opportunities: Increase in Consumer Spending in the U.S. As the United States has seen a boost in the economy, this leads to increased spending for consumer. This is a positive because they are able to buy more product and in-turn increases demand. New Product Launches Kellogg has launched many new and innovative products in the past few years. A few examples include: Town House Pretzel Crackers and Cornbread Cookies. New Product Launches allow the company to stay competitive in the market and also enables them to tailor to the new consumers trying the newly launched products. Threats: Stringent Regulations Similar to Hershey’s, the company may find strict regulations difficult to follow. For example, the company may need to adjust operations to comply with FDA regulations. This may cost the company additional money to change packaging, recipes etc. If a company does not comply, this may lead to fines and penalties. Rising Labor Costs The United States has seen an increase in labor costs and minimum wage in the past few years. Although this is great for the American worker, this may increase operating costs and affect the profit margin of the company. 15 Situational analysis Objectives for the new product plan: Distribution will be executed in four stages. We will first roll out the S’moreSmackers product at the eight college campuses nationwide that have both the coolest climate as to make a hot snack more appetizing, and a large, famous, high-attendance football program. The colleges are Michi- gan State, Oklahoma University, Oregon, Colorado State, Ohio State, Miz- zou, Stanford, and Notre Dame. Stage 2 distribution executes intensive dis- tribution across the largest metropolitan areas near these universities, which are Denver, Boston, Portland, Seattle, Cincinatti, Chicago. Stage 3 deploys regional distribution to first the Northwest, then Central Mountain region, and finally North Midwest. Stage 4 distribution is the national rollout, which will arrive in all regions of the continental US not covered in Stage 3. Initiate test marketing of S’moreSmackers in 8 major college campuses from September – December 2015 Offer samples at university football games in Oklahoma University, Michigan State, Oregon, and Colorado State through the month of September. * 10,000 samples passed out per game, per university. * 160,000 samples passed out for the month of September. Sell 200,000 units in these four markets in October – November 2015 * Use print advertising, radio, and game sponsorship to advertise product availability. Offer 160,000 samples in Ohio State, Mizzou, Stanford, Notre Dame in October, 2015, with same sale strategy from November – December 2015. * Accomplishing sales goals of 400,000 units from October – December, execute intesnive distribution in metropolitan areas of Denver, Boston, Portland, Seattle, Cincinatti, Chicago for sale in Q1. 16
  11. 11. Situational analysis Segmenting, targeting, positioning: Our distribution will eventually be intensive. We will have the S’moreSmackers product in every convenience store, grocery store, and vending machine we can find. However, when test marketing, we will be selective with our distribution and use research to concentrate our efforts on select market segments. Our initial target market segment will be males and females in college, age 18-24. The lifestyle that we are looking for is the busy, active college student who has the disposable income to pay for time-saving conveniences, like quick snacks and cheap meals they can take on the go. Our research supports the idea that the modern US college student is pressed for time and money, and this creates a market opportunity for our low-cost, instant snack. In 2011, the US Census reported that 71% of the nation’s 19.7 million college undergraduates are working; a number expected to increase each year. Of that 71%, 80% work at least 20 hours a week. When looking at buying behaviors of college students, it is known and often joked about how often college students snack, but we collected research to verify the results anyway. They weren’t surprising. Y-pulse’s survey of 1,314 consumers (including 177 full-time college students) found that college students snack more than all other demographics combined. This means we will have snack-hungry, time-crunched, busy college students all concentrated in relatively small geographic areas. 17 Situational analysis Segmenting, targeting, positioning: Our competition can be any portable snack that a college student may choose, whether salty or sweet. However, the main competition will be Lil Debbie, as they are in the same product class as we are: the portable, sweet snack. However, Lil Debbie has no active marketing, advertising, or promotion on campus. There are no representatives actively persuading students to try the latest Lil Debbie snack in production, if there are any. The extent of Lil Debbie’s presence on campus only extends to convenience stores and gas stations nearby. With our marketing push aimed at college students, such as test marketing samples at football games and lunch areas, we will be first and foremost in the students’ minds when making a sweet snack decision. In short, we are the only sweet snack brand on campuses with active marketing and promotional strategies. 18
  12. 12. Marketing Mix Product decisions: In the saturated cookies and crackers industry, there are thousands of options for consumers to choose from around just about every corner of the supermarket. For our purposes, we will be focusing on creating an effective strategy based on the similar strategies of products that will be located nearby, other point-of- purchase and impulse buy products – with some contrasting strategy to help separate S’moreSmackers from the rest. The uniqueness of the product idea will be the main selling point of S’moreSmackers. Not only is the idea of a pre-cooked s’more enticing and mouthwatering, but it is much more convenient than needing to purchase three separate products in order to obtain one final product – and having the flame to go with it! This product strategy does not differ greatly from Hershey’s current offerings; however, S’moreSmackers will be positioned as a higher end product, for both Hershey’s products and the competition. Not only does it have new technology involved in the preparation of the finished product, but it fulfills a need that the average consumer didn’t even know they had. The product that we as Hershey are introducing is the S’more Smackers. This product consists of the three most wonderful things that everyone craves. Unfortunately the wonder smore is not as assessable when not but a fire. 19 Marketing Mix Product decisions: So our product will provide you with that warm, wonderful, campfire taste that you won’t be able to resist. We will be using a foilly looking material that will be full of air and look very puffy. When you are ready for that warm delicious s’more no matter where you are, you smack it between your hands, in the packaging, which instantly heats the s’more to perfect campfire temperature. On both top and bottom of our S’moreSmackers there will be a light golden colored graham cracker, supplying the wonder crunch of the s’more. Between that there will be a giant, fluffy, white, gooey, warm marshmallow that will keep our Smackers together. Last, but not least is our wonderful Hershey’s milk chocolate that will give our S’moreSmackers the rich taste of goodness, for our consumers. Our product is completely new to the market and the only thing that could compete to the real, authentic taste is an actual s’more around a campfire, which isn’t very assessable to everyone or all the time. Another competitor that may be a contester is poptart s’mores, although these do not warm themselves and they do not use real authentic graham crackers, marshmallows, and our delightful, wonderful tasting Hershey’s milk choco- late. Other than these two things that compare to our product we don’t see anything else that will compare. 20
  13. 13. Marketing Mix Price Decisions: The price strategy for S’moreSmackers will take on several forms: -Skim Pricing -Volume Pricing -Market Pricing Skim Pricing: As with all new products in a given market, value is established almost immediately. To coincide with the brand equity established over several decades by Hershey, the initial distribution of S’moreSmackers will be at a premium price compared to competitors. The convenience of the product, coupled with its uniqueness will entice customers to try the product over competitor’s products, and help recoup development costs quickly. Below is a chart of competitor pricing (by unit): 21 Marketing Mix Volume Pricing: The Hershey Company has spent over a century selling their products in the U.S and beyond and has solidified their position as the leader in their market. Founded in 1894, Milton Hershey and his company have become a household name in snack foods, and the Hershey name is almost synonymous with the word chocolate. This experience and ability to have control over channels of distribution will allow Hershey to keep costs low and offer volume pricing to the retailers that do the most business with them. This will not only keep shelves stocked, but will also help S’moreSmackers reach as many customers as quickly as possible. Market Pricing: The advantages of the Hershey name will also allow S’moreSmackers to be sold at a premium, as the Hershey name is considered a premium chocolate and the premise behind a s’more that can be warm and ready to eat anytime, anywhere, will be enticing to consumers that are pressed for time, but still want to be able to enjoy a delicious treat that they remember from their childhood. 22
  14. 14. Marketing Mix Given the nature of our product being able to be sold as single serving for checkout lines, point-of-purchase displays, as well as gas station/convenience store placement, we will also be able to sell the product in bulk as a boxed package with 6-10 individually wrapped single servings at a discounted price from individual selections, as the customer will be willing to pay a higher price for convenience. We are planning on pricing out individual packets, depending on the area, at $1.99 per serving, and our boxes at $6.99. Studies have shown that our target market is willing to pay in a range of $1.00-$3.00 for a morning snack, and between $1.00 and $5.00 for an afternoon snack. This will help us maintain a steady flow of sales from not only our teen to college aged demographic, but also younger audiences in the pre-teen area that bring less income to the table than their older counterparts. This type of market pricing works well with our strategy of maintaining the image of being a “treat” – not a cheap snack to grab if you’re feeling hungry, this is a product we want customers to see as convenient, and worth the slightly higher price for the convenience and the quality of the ingredients. 23 Marketing Mix Place decisions: The S’moreSmacker product is a Hershey-branded snack, which is produced by Hershey themselves. We operate under a consumer channel classification. With our initial push being on university campuses, we will at first operate with a Producer > Consumer channel and market the product directly to students using test marketing, and light personal selling. When our campaign broadens to the general public, we will begin intensive distribution. We will want our product in every grocery and convenience store possible, due to the saturation of sweet snack brands and choices to the consumer, let alone snack brands in general. When dealing with large retailers with enormous buying capabilities, we will likely be forced to sell from production straight to the retail at a lower concessional price. However, when selling the S’moreSmackers to other chains, we will have enough channel power to sell to a wholesaler, who will then sell to a retailer, then consumer. Our channels will look like this: Production > Large Retailer > Consumer Production > Wholesaler > Small-Med Retailer > Consumer 24
  15. 15. Marketing Mix Place decisions: When considering competition, the Hershey snack brand can sometimes seem homologous or interchangeable to Lil Debbie. The S’moreSmackers product will hopefully be the first step of many that sets us apart from other generic sweet packaged snacks. Our distribution strategy, once intensive, will rival our competitions’. However, we hope to become the new “dessert Raman” in regards to college students with our initial marketing strategies. When first rolling out our product, we are operating under select distribution, where our product can only be found on college campuses, as stated previously. Our targeted marketing efforts toward college campuses will be what set us apart from Lil Debbie. Our chosen strategy will not drastically affect Hershey’s preexisting pricing goals. The technology used to instantly cook the S’mores is a very low cost chemical reaction used by the US military to cook Meals Ready to Eat. Our price should not be more than $1-2 higher than other generic snacks; a price many consumers will pay for the novelty. Our main difference will be in positioning of the product toward college students and busy people “on the go.” The “grab-and-go” food market is saturated with health focused snacking for professionals or parents, aged 28-45. Ours will be the first to focus on sweet, cheap, unique, All-American snacking for the busy college student. 25 Marketing Mix Test Marketing: Our test marketing will be simple, yet effective. During football season, we will pass out S’moreSmacker Singles (with permission) near concessions. The strategy behind this is that our already concentrated target market (college students in a college campus) is even more concentrated in the football stadium. As well, the autumn timeframe for football season will likely see a temperature drop during the football games, making the hot instant snack, an instant favorite. We will also be in university lunch areas, tossing our snack to students, who will activate the heatpack and S’more creation when the snack “smacks” their hand during the catch. 26
  16. 16. Marketing Mix Promotion Decisions: Given the strong presence The Hershey Company has in the world of advertising, the advertising that will be needed for S’moreSmackers will be used through channels that Hershey’s already has experience with. To choose the proper outlets, we consulted MediaMark Reporter to establish a target market by researching the customer base that purchases products from Hershey’s and their com- petitors. For our advertising purposes, we will be using billboards, magazines, and short television and youtube adverts, as well as lively and fun in-store product demonstrations. Advertising: S’moresmackers promotion strategy is fairly simple and straight to the point. We intend to use multiple outlets: tv advertisments, youtube, print, billboards, and in store promotions. Hershey’s has a strong following as well as history with advertising their products. We intend to stick to their advertising pattern and continue promotions similiar to the ones they have now for products such as their chocolate bars. 27 Marketing Mix Advertising through tV & Commercials: In the usual Hershey’s fashion, which is simplistic, striking, and succinct, we propose a carbon copy of this strategy for S’moreSmackers. A proven effective strategy for Hershey’s thus far, the advertising is simple, and as such, does not require a lot of time to design and can be pushed out fairly quickly. It emphasizes the food itself in great detail to, for lack of better terms, whet the appetite of its viewers and entice them to purchase the product the next time they are able. This is the entire goal of our product strategy, to get the customer to try the product, and once they come to their conclusion about the convenience and the overall deliciousness that is a proper s’more, the repeat business will be established, and the market share for S’moreSmackers will follow. 28
  17. 17. Marketing Mix Youtube: Another outlet we will want to display our advertisements will be Youtube. Youtube advertisements are plentiful nowadays, and it is always best to keep them short and sweet with the ability of Youtube users to skip what advertisements they like after a certain amount of time. According to a Billboard article by Alex Pham, “ In the first six months of 2012, monthly video consumption on YouTube grew 33%, from 3 billion hours in January to 4 billion hours in June.” And that advertising effectiveness on Youtube equated, even with skips, to “one minute of ads for every 356 minutes watched”. This is of no concern to our strategy, however, as it does not take but a short, quick, and bold ad to get the message across for our product – we believe it can even be done within the 5 second window that all ads that can be skipped have before giving the end user the ability. Another huge advantage to advertising via YouTube is that the advertisements can be shared to friends on other social media platforms such as Twitter and Facebook, and ads that are skipped are not charged to the advertiser. It’s a win-win of the best proportions – much like the perfect s’more. 29 Marketing Mix Billboards and Print: Another cost-effective and common method of advertising we want to employ in our marketing mix for S’moreSmackers will be billboard and print advertisements. (See Appendix _ for examples). These methods are tried and true, with an outreach that cannot be rivaled for the cost. According to metadata pulled form MediaMark reporter (See Appendix _) , our prime targets for print advertisements will be magazines, specifically Good Housekeeping, Food Network Magazine, Woman’s World, and Cosmopolitan. These magazines show a high consumer base for purchasing snack foods, like our product, within the last 6 months. In store promotion: We will recommend a wide variety of promotion strategies, such as sampling and product demos to get the customer to be more apt to try our product. These efforts reach out to the consumer at the point of purchase, entice them, and any children they may have, to try the product. This type of engagement with the customer has proven to be very effective at making same-day sales, with a study from California State University in 2010 “concluding that most sampled products have a statistically significant increase in sales quantity; the average increase was a dramatic 88%.” (Wu, John) 30
  18. 18. Marketing Mix With in-store promotion, the company also has the option to give out promotional materials such as shirts, pens, or otherwise, to customers willing to try the product, drastically increasing product awareness and to boost sales around the country. Our promotion strategies tie in well with the product positioning of being an easy to see and reach product, readily available at most retail shopping stores. The methodologies are proven to be effective, and Hershey has always taken a fun spin on their own methods, and we want to carry on this tradition with S’moreSmackers. Really, shouldn’t an exciting product have an exciting marketing plan? We feel that it should, and our advertising designs reflect this very mindset. With the introduction of a revolutionary, unprecedented product, competition would have to respond to our efforts. It is most likely that competitors will try to imitate our patented product to the best of their ability, but won’t be able to achieve the same outcome. This becomes a facet of the snack market that’s difficult to enter and our competitors will continue to focus their efforts on the end consumer because of feasibility and lost market share value due to the introduction of our product. 31 Marketing Mix Attack and Defense Strategy: Hershey’s will deploy print and media advertisements that not only highlight the convenience of the instantly cooked S’more, but also use innocently cynical verbage to point out flaws in the “strengths” and weaknesses of the competition, which is both traditional S’mores, Lil’ Debbie’s, and Nabisco. Therefore, by definition, we will use the encirclement strategy to attack our competition’s strengths and weaknesses to not only create a unique, humorous voice for our product line, but also gain market share. First, the S’moreSmackers can attack the original s’mores weakness of inconvenience. The consumer needs to purchase three different products, and cook them using either an open flame (which can burn it), or a microwave (which ruins the taste). However, traditional s’mores have the strength of being an American outdoorsy, campfire tradition. So we will execute a few ads that make light of this, which will mention the benefits of either starting your own tradition, or just ditching old ones in general. We will also can also attack products like Little Debbie or Nabisco by advertising how we’re shaking up the industry with a scientifically-perfectly-heated-and-cooked-instant American Classic, instead of dry, cheap $1 “mini-cakes.” We can use our well-established Hershey’s brand name to legitimize our efforts to place ourselves above the competition in terms of quality. 32
  19. 19. Marketing Mix Attack and Defense Strategy: In terms of defense strategies, our defense will simply be a preemptive strike. Before Lil’ Debbies has a chance to respond to our product by rolling out a nostalgic ad to remind customers about how they grew up eating Lil Debbie’s, we’ll advertise how our s’mores cook instantaneously and taste a hell of a lot better than a cheap $1.00 chocolate cake with icing substitute. Finally, They, we have a diverse enough company portfolio to be able to finance the cost of intense distribution and promotion of the product, so we can gain market share and be able to afford promotions through commercials, billboards, and magazine advertisements. Ads targeted at Traditional S’mores Weaknesses * Instant s’more. No campfire needed. * Instant s’more. No microwave needed. * No burns, no mess. Just perfection. Ads targeted at Traditional S’mores Strengths * The brand new American tradition. * The new American classic. * The brand new American tradtion. Attacking the weaknesses of Lil Debbie / Nabisco * Party in the pack, starts with a smack. * Better than those cheap imitation cakes. 33 Marketing Mix Summary/Conclusion: To conclude, we believe that S’moreSmackers has more than enough potential to be a mainstream hit and quickly become America’s favorite snack. Developing a brand new strategy will be less than necessary as Hershey’s already arguably rules the market of treats and snacks, and the methods of promotion are tried and true. This ability will contribute to cost savings from strategy development and will help recoup development costs for the product. We believe this is the future of the snack food industry and Hershey’s will lead the way with a strong… and delicious product. 34
  20. 20. Marketing Mix References: (2014, September 26). In Convenience Store Decisions . Retrieved from http://www. cstoredecisions.com/2014/09/26/depth-look-college-student-snacking/#_ Culliney, K. (2015, April 10). In Bakery and Snacks . Retrieved from http://www.bak- eryandsnacks.com/Markets/Snacking-trends-Millennials-important-says-Euromonitor Fottrell, Q. (2013, August 8). In Market Watch . Retrieved from http://www.market- watch.com/story/nearly-4-out-of-5-students-work-2013-08-07 Kellogg Company - Financial and Strategic Analysis Review. (2014, December 26). Retrieved April 23, 2015, from http://callisto.ggsrv.com/imgsrv/FastFetch/ UBER1/304929_GDCPG30653FSA COMPANY PROFILE, The Hershey Company. (2014, January 1). Retrieved April 23, 2015, from http://www.marketline.com Mediamark Report, April 23, 2015 – See Appendix Mondelez International: A Short SWOT Analysis. (2014, June 10). Retrieved April 23, 2015, from http://www.valueline.com/Stocks/Highlights/Mondelez_International__A_ Short_SWOT_Analysis.aspx#.VTgy2huBHIU Nabisco | American company. (2015) Retrieved April 23, 2015, from http://www.britan- nica.com/EBchecked/topic/890719/Nabisco O’Shaugnessy, L. (2013, February 5). In CBS Money Watch. Retrieved from http:// www.cbsnews.com/news/more-students-working-a-lot-in-college/ PHAM, A. (2013). Time Is Money For YouTube. Billboard, 125(13), 16-17. Wu, J. (2010). Effects of In-Store Sampling on Retail Sales: Case Study of a Ware- house Store. Journal Of Global Business Issues, 4(1), 93-96 35 Marketing Mix Appendix a: 36
  21. 21. Hershey’s s’moresmackers 15 Hershey’s S’moresmackers SO GOOD, You’ll Want S’more. www.hershey’s.com/s’moresmackers
  22. 22. www.hershey’s.com/s’moresmackers Hershey’s S’moresmackers S’more the merrier. Hershey’s S’moresmackers SO GOOD, YOU’LL REMEMBER YOUR MANNERS. THANK YOU. S’MORE PLEASE.
  23. 23. Hershey’s S’moresmackers SMACK THE PACK. WWW.HERSHEY’S.COM/S’MORESMACKERS INSTANT SNACK. Step 1: Buy Marshmallows. Step 2: Buy Graham Crackers. Step 3: Buy Hershey’s Chocolate. Step 4: Build a campfire. step 5: avoid steps 1-4. Step 6: Buy s’moresmackers. Hershey’s S’moresmackers. WWW.HERSHEY’S.COM/S’MORESMACKERS
  24. 24. Marketing Mix Appendix B: In developing the promotional strategy for S’moreSmackers, Hershey’s found MediaMark Reporter Index to be an invaluable source of information. In particular, Hershey’s was focused on determining the proper media sources for our target market. For our print advertisements, we wanted to choose magazines that will reach the most amount of people interested in snack foods. In addition, Hershey’s will also be advertising on popular television station types. 37

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