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- 2. Content Chapter 11 Introduction Industry overview Expansion Competitors Market share 4P’s Visit to retailer Marketing Management – Hershey’s chocolate 2 SECTION-D
- 3. Chapter 11 CHRONOLOGY 1894:Milton Hershey decided to produce sweet chocolate 1898: adapted a new symbol 1900: milk choclate bars , wafers Marketing Management – Hershey’s chocolate SECTION-D 3
- 4. Chapter 11 CHRONOLOGY (contd) 1907: Kisses 1925:Goodbar 1926:syrup 1927: Hershey goes public 1945: Milton Hershey died 1956 : Reese Candy company acquired Marketing Management – Hershey’s chocolate 4 SECTION-D
- 5. Chapter 11 CHRONOLOGY (contd) 1963: SMITH FALLs (first plant outside Pennyslvania) 1965: third plant -Oakdale, California 1966: acquired San Giorgio Macaroni and Delmonico Foods 1968: Nationwide consumer advertising campaign 1983: Krackle launched Marketing Management – Hershey’s chocolate 5 SECTION-D
- 6. Chapter 11 CHRONOLOGY (contd) 1986: started (first ever)Product Placement Reese's Pieces on E.T. 1990: acquired Ronzoni Foods 2005: name changed to “Hershey Chocolate Corporation” & ………. Marketing Management – Hershey’s chocolate 6 SECTION-D
- 7. Chapter 11 NOW……. oExport in over 90 countries oNet sales $4billion o13700 employees o10.7 $BILLION MARKET CAP OF HERSHEY oPresident, CEO, and Director:- David J. (Dave) West Marketing Management – Hershey’s chocolate 7 SECTION-D
- 8. VISION :Eat lotsof chocolate and you'll be able to see better." MISSION: Bringing sweet moments of Hershey happiness to the world every day VALUES : Commitment to health & wellness Marketing Management – Hershey’s chocolate 8 SECTION-D
- 9. Chapter 11 The Players Hershey Trust Company Milton Milton M.S. Hershey Hershey Hershey Foundation School School Trust (non-profit) Hershey Foods Corporation Hershey Theatre (31% owned) Hershey Museum Hershey Gardens Hershey Entertainment Hershey Community and Resorts Archives (100% owned) Marketing Management – Hershey’s chocolate 9 SECTION-D
- 10. Chapter 11 HERSHEY CHOCLATE WORLD VIDEO 1 Marketing Management – Hershey’s chocolate 10 SECTION-D
- 11. Chapter 11 GROSS TURNOVER Marketing Management – Hershey’s chocolate 11 SECTION-D
- 12. Chapter 11 INDUSTRY SIZE o The global confectionery market was valued at approximately $147 billion USD in 2008, an increase of 3.2% over 2007 oSales of chocolate confectionery are expected to more than double from INR26.9bn in 2009 to INR54.98bn in 2014 (63m tonnes in 2009 to 127m tonnes in 2014). Marketing Management – Hershey’s chocolate 12 SECTION-D
- 13. Chapter 11 INORGANIC EXPANSION 2004-Mauna Loa Macadamia Nut Corp. from The Shansby Group 2005-Berkeley, California based boutique chocolate-maker Scharffen Berger 2005-Joseph Schmidt Confections, the San Francisco based chocolatier Marketing Management – Hershey’s chocolate 13 SECTION-D
- 14. Chapter 11 INORGANIC EXPANSION 2006- Dagoba Organic Chocolate based in Ashland, Oregon. 2007 - JV in India with Godrej Beverages & Foods Ltd. 2009 - Van Houten consumer chocolate business Marketing Management – Hershey’s chocolate 14 SECTION-D
- 15. Chapter 11 COMPETITORS Marketing Management – Hershey’s chocolate 15 SECTION-D
- 16. Chapter 11 COMPETITION (till 2009) S.NO COMPETITOR NET NO. OF FACTORIES SALES EMPLOYEES WORLDWIDE (approx) 1 MARS INC $16.50B 65000 1353 (VIRGINIA USA) 2 KRAFT FOOD $14.4B 90000 1683 CO.(ILLONOIS ,USA) 3 NESTLE SA $11.83B 283,000 4563 (VEVEY, SWIZERLAND) 4 CADBURY $8.81 B 47000 64 (LONDON UK) 5 HERSHEY $ 6B 13000 13 (PENNSYLVANIA USA) SOURCE: http://www.top5ofanything.com/index.php?l=1365 Marketing Management – Hershey’s chocolate 16 SECTION-D
- 17. Chapter 11 MKT SHARE-BY VOLUME Marketing Management – Hershey’s chocolate 17 SECTION-D
- 18. Chapter 11 MKT SHARE-BYshare(global) Marketing Management – Hershey’s chocolate 18 SECTION-D
- 19. Chapter 11 MKT SHARE-BY SHARE (U S) Marketing Management – Hershey’s chocolate 19 SECTION-D
- 20. Chapter 11 Marketing Management – Hershey’s chocolate 20 SECTION-D
- 21. Chapter 11 Marketing Management – Hershey’s chocolate 21 SECTION-D
- 22. PRODUCTS Chapter 11 HERSHEY offers in its product Variety Quality Design Brand name Sizes Marketing Management – Hershey’s chocolate 22 SECTION-D
- 23. PRODUCTS Chapter 11 Marketing Management – Hershey’s chocolate 23 SECTION-D
- 24. PRODUCTS Chapter 11 Marketing Management – Hershey’s chocolate 24 SECTION-D
- 25. PRODUCTS Chapter 11 Marketing Management – Hershey’s chocolate 25 SECTION-D
- 26. PRODUCTS Chapter 11 NUTRITION VALUE Marketing Management – Hershey’s chocolate 26 SECTION-D
- 27. Chapter 11 PRICE • Hershey’s pricing strategy ---- maintaining the price level at a consistently hiked rate --- targeting mostly foreigners & upper class Indians. •Price cut off, or no increase in prices but products weight would be reduced Marketing Management – Hershey’s chocolate 27 SECTION-D
- 28. Chapter 11 PRODUCT PLACEMENT Marketing Management – Hershey’s chocolate 28 SECTION-D
- 29. Chapter 11 PROMOTION Marketing Management – Hershey’s chocolate 29 SECTION-D
- 30. Chapter 11 PROMOTION Wrapper Cash codes will appear on specially marked wrappers from Hershey's most popular single serve candy bars, cookies and snack bars. Marketing Management – Hershey’s chocolate 30 SECTION-D
- 31. Chapter 11 PROMOTION HERSHEY & COKE partnership Marketing Management – Hershey’s chocolate 31 SECTION-D
- 32. Chapter 11 Marketing Management – Hershey’s chocolate 32 SECTION-D
- 33. Chapter 11 PROMOTION National radio promotion 1-Kitkat coffee bar coffee bundling 2- Reese program –(coming soon) Marketing Management – Hershey’s chocolate 33 SECTION-D
- 34. Chapter 11 PRODUCT POSITIONING •Product quality (levels of fat/cocoa) : e.g. Kisses, though priced higher, sells more than other choclates, presumably due to quality. •Seasonal product •Packaging: this being predominantly an impulse driven purchase category, packaging is an important mode of attracting attention at the display counter. Marketing Management – Hershey’s chocolate 34 SECTION-D
- 35. Chapter 11 PRODUCT POSITIONING •International heritage of the product •Size (mainly in US) •Shape (e.g. Bliss- chocolates in shape of toys targeted at children) •Chocolates with additives like fruits and nuts Marketing Management – Hershey’s chocolate 35 SECTION-D
- 36. Chapter 11 BRAND Wt PRICE POSITIONING AD CAMPAIGN (promotion) REESE 2.4 oz $34.99 Snack food There's no wrong way to eat a Reese's KISSES 24 OZ $8 VALENTINE’S DAY Recipe for every JUST GOT A WHOLE occasion LOT SWEETER TWIZZL 5 $13 Low fat snack Make mouth happy ERS ounce KITKAT 36 gm. Rs 15 Snack for routine use Have a break, Have a KitKat BLISS 9.6 oz $61.28 Best for house party Its not just a choclate , (272 (blissful pairing) it’s a BLISS g) Marketing Management – Hershey’s chocolate 36 SECTION-D
- 37. Chapter 11 HERSHEY’S Premier Partner Program Marketing Management – Hershey’s chocolate 37 SECTION-D
- 38. Chapter 11 Product Marketing Management – Hershey’s chocolate 38 SECTION-D
- 39. Chapter 11 Placement Marketing Management – Hershey’s chocolate 39 SECTION-D
- 40. Chapter 11 Promotion (2011) Marketing Management – Hershey’s chocolate 40 SECTION-D
- 41. Chapter 11 RETAILER VISIT I.N.A Khan Market, Morning store-G K1M Block Big apple- Lakshmi nagar Marketing Management – Hershey’s chocolate 41 SECTION-D
- 42. Chapter 11 Q. Whether Shelf Space purchased by Hershey or not? Ans. NO Q. Does the representative of the company visit the store often? Ans. NEVER Q. If the product is not sold under expiry date bracket what you generally do? Ans. Retailer send the product back and with due permission they start selling the product again with the help of various schemes.(Discount up to 20%,Buy one get one Free etc.) Marketing Management – Hershey’s chocolate 42 SECTION-D
- 43. Chapter 11 Q. Slow moving product ? Ans. Hershey’s Nugget Q. Fast moving Product ? Ans. Hershey’s Syrup Q. Any promotional support from the company ? Ans. NO Q. Any signboard, hoarding availed by the Company? Ans. NO Marketing Management – Hershey’s chocolate 43 SECTION-D
- 44. Chapter 11 Q. Do customers ask for Hersey’s product or you refer “PUSH Strategy” it to them? Ans. We generally refer Hershey’s Syrup. Q. Are you satisfied with the offers and schemes given by Hershey? Ans. Satisfaction—3 out of 4 Q. Any Suggestions ? Ans. The prices should go down as it’s one of the main concerns of the Indian customers. Q. Do you have the stock all the time? Ans. Yes, but we generally increase our stock during festive seasons (Diwali) and winters. Marketing Management – Hershey’s chocolate 44 SECTION-D
- 45. Chapter 11 Q. How frequently you order for Hershey product? Ans. Thrice in a year.(heavy sales during season) Q. Who are the customers who buy Hershey’s product? Ans. Mostly foreigners upper class Indians. Q. Is there enough brand awareness about the Hershey product among the customers? Ans. YES (Hershey’s Syrup , Kisses , Reese) Marketing Management – Hershey’s chocolate 45 SECTION-D
- 46. Chapter 11 SITES •http://www.hersheys.com/CSTORE/consumer-promotions/hersheys-coke- bundle/Default.aspx# •http://www.top5ofanything.com/index.php?l=1365 •www.euromonitor.com •www.hersheycompany.com Marketing Management – Hershey’s chocolate 46 SECTION-D
- 47. Marketing Management –Hershey’s chocolate 47 SECTION-D
- 48. Marketing Management –Hershey’s chocolate 48 SECTION-D
- 49. Chapter 11 Marketing Management – Hershey’s chocolate 49 SECTION-D
Editor's Notes
- #4 In 1900, the company began producing milk chocolate in bars, wafers and other shapes.
- #5 MR. GOODBAR Candy Bar (1925), HERSHEY’S Syrup (1926), HERSHEY'S chocolate chips (1928) and the KRACKEL bar (1938So in 1927, Milton Hershey decided to take advantage of this fact by reorganizing his company and offering shares to the public. His Hershey Chocolate Company was incorporated as the Hershey Chocolate Corporation. The initial stock offering in the new Hershey Chocolate Corporation consisted of 350,000 shares of convertible preferred stock, and the opening price was $61.50 a share
- #6 The first plant outside Hershey, Pennsylvania opened on June 15, 1963 in Smiths Falls, Ontario, Canada and the third opened on May 22, 1965 in Oakdale, CaliforniaAmong the many acquisitions were San Giorgio Macaroni and Delmonico Foods (1966); manufacturing and marketing rights to English candy company RowntreeMacKintosh’s products (1970); Y&S Candies, makers of TWIZZLERS licorice (1977); Dietrich Corp.’s confectionery operations (1986); Peter Paul/Cadbury’s U.S. confectionery operations (1988); and Ronzoni Foods (1990).n 1968, the newly renamed and reorganized Hershey Foods Corporation announced plans for a nationwide consumer advertising campaign spearheaded by the famous Ogilvy & Mather ad agency.
- #7 1986 Hershey executive Jack Dowd met with Hollywood producer Steven Spielberg and struck a deal to include REESES’S PIECES candy in Spielberg’s upcoming film, E.T.: The ExtraterrestrialAcquisitions:1990: Ronzoni Foods The Hershey Company (NYSE: HSY), known until April 2005 as the Hershey Chocolate Corporation[6] and commonly calledHershey's, is the largest chocolate manufacturer in North America.
- #8 In fact, the company exports to over 90 countries. With approximately 13,700 employees and net sales in excess of $4 billion. The Hershey Company remains committed to the vision and values of the man who started it all so many years ago. The Hershey Company has operations throughout the world and more than 12,000 employees. With revenues of more than $5 billion, Hershey offers such iconic brands asHERSHEY'S, REESE'S, HERSHEY'S KISSES, KIT KAT, TWIZZLERS andICE BREAKERS as well as the smooth, creamy indulgence ofHERSHEY'S BLISS chocolates.
- #9 VISION : "Eat lots of chocolate and you'll be able to see better."Mission : Bringing sweet moments of Hershey happiness to the world every dayTo our stakeholders, this means:Consumers – Delivering quality consumer-driven confectionery experiences for all occasionsEmployees – Winning with an aligned and empowered organization … while having funBusiness Partners – Building collaborative relationships for profitable growth with our customers, suppliers and partnersShareholders – Creating sustainable valueCommunities – Honoring our heritage through continued commitment to making a positive difference ---------------------------------------------------------------------------XX------------------XX-------------------------------------------------------------------Values: The Hershey Company is committed to helping people achieve a balanced lifestyle by investing in strategies that promote wellness among consumers and employees, offering choices in the marketplace, and advancing the science on diet and health.Consumers – A founding member of the Healthy Weight Commitment Foundation, we are dedicated to providing products that fit into a balanced lifestyle. In addition, our outreach programs, including MODERATION NATION and HERSHEY’S TRACK AND FIELD GAMES, offer hands-on opportunities to explore healthy eating and physical activity as cornerstones of good health.Employees – A commitment to health starts at home. We support an exemplary employee wellness program, including fitness centers at our corporate campus, workshops and online resources, incentive programs and wellness campaigns. Hershey’s employees are also engaged in community outreach programs that support the well-being of our consumers and communities.Marketplace – With a 100-year hundred heritage of providing leadership in the confection industry, the Hershey Company provides a range of product choices that fit into a balanced lifestyle.Health Science – Through the HERSHEY CENTER FOR HEALTH AND NUTRITION, we study the potential health benefits of cocoa, chocolate, nuts and other nutritious ingredients, and use this information to guide product development and consumer and influencer outreach.
- #12 =REVENUE –COGSGross Margin is a calculation of revenue less cost of goods sold, and is used to determine how well sales cover direct variable costs relating to the production of goods.Net income/sales, or profit margin, is calculated by investors to determine how efficiently a company turns revenues into profits.he formula for calculating Cost of Goods Sold is Beginning Inventory + Purchases - Ending Inventory. The cost of goods sold is subtracted from sales to determine the gross profit on an income statement.
- #14 In 2000 – Nabisco IncIn 2004 – Manua Loa Macadamia Nut Corp.In 2005 – Scherffen Berger Chocolate MakerIn 2005 – Joseph Schmidt Confections, Inc.In 2006 – Dagoba Organic ChocolateIn 2007 – JV in India with Godrej Beverages & Foods Ltd.In 2007 – Development & distribution agreement with Starbucks.In 2009 – Van Houten consumer chocolate businessOther sales and acquisitionsIn 1969, Hershey received a license from Rowntree's to manufacture and market Kit Kat and Rolo in the United States. As of January 2011, Hershey continued to make and market these brands in the U.S. under license from Nestlé, owners of the Rowntree brand.In 1977, Hershey acquired Y&S Candies, founded in 1845, and became the makers of Twizzlers licorice candies. In 1986, Hershey's began a brief foray into cough drops when it acquired the Luden's cough drops brand. But by 2001, the brand had been sold to Pharmacia,[22] and Luden's eventually became a product of Johnson & Johnson. In 1988, Hershey's acquired the rights to manufacture and distribute many Cadbury-branded products in the United States. The Cadbury creme eggs sold in the United States are imported by Hershey from Cadbury in the United Kingdom.[23] In 1996, Hershey purchased the American operations of the Leaf Candy Company from Huhtamäki.On July 25, 2002 it became public knowledge that the Hershey Trust Company was seeking to sell its controlling interest in the Hershey Foods Corporation. The value of Hershey stock skyrocketed 25% with over 19 million shares trading that day. But over the following 55 days, widespread press coverage, as well as pressure from Pennsylvania Attorney General Mike Fisher, the Community of Hershey, and Dauphin County Orphans' Court Senior Judge Warren G. Morgan, led to the sale being abandoned. The seven Hershey Trustees who voted to sell Hershey Foods on September 17, 2002, for US$12.5 billion to the William Wrigley Jr. Company were removed by Attorney General Fisher and Judge Morgan. Ten of the 17 Trustees were forced to resign and four new members who lived locally were appointed. The former Pennsylvania Attorney General, LeRoy S. Zimmerman, became the new Chairman of the reconstituted Milton Hershey School Trustees. Mr. Zimmerman has publicly committed to having the Milton Hershey School Trust always retain its interest in The Hershey Company. If Hershey is sold, the rights to make and market Kit Kat and Rolo products in the U.S. would revert to Nestlé.In December 2004, Hershey acquired the Mauna Loa Macadamia Nut Corp. from The Shansby Group.[24]In July 2005, Hershey acquired the Berkeley, California based boutique chocolate-maker Scharffen Berger.[25] In November 2005, Hershey acquired Joseph Schmidt Confections, the San Francisco based chocolatier, and a year later, in November 2006, Hershey acquired Dagoba Organic Chocolate, a boutique chocolate maker based in Ashland, Oregon.Hershey's chocolate is available across the United States, due to their wide network of distribution.[26] They have three mega distribution centers, with modern technology and labor management systems.[27]
- #15 In 2000 – Nabisco IncIn 2004 – Manua Loa Macadamia Nut Corp.In 2005 – Scherffen Berger Chocolate MakerIn 2005 – Joseph Schmidt Confections, Inc.In 2006 – Dagoba Organic ChocolateIn 2007 – JV in India with Godrej Beverages & Foods Ltd.In 2007 – Development & distribution agreement with Starbucks.In 2009 – Van Houten consumer chocolate businessOther sales and acquisitionsIn 1969, Hershey received a license from Rowntree's to manufacture and market Kit Kat and Rolo in the United States. As of January 2011, Hershey continued to make and market these brands in the U.S. under license from Nestlé, owners of the Rowntree brand.In 1977, Hershey acquired Y&S Candies, founded in 1845, and became the makers of Twizzlers licorice candies. In 1986, Hershey's began a brief foray into cough drops when it acquired the Luden's cough drops brand. But by 2001, the brand had been sold to Pharmacia,[22] and Luden's eventually became a product of Johnson & Johnson. In 1988, Hershey's acquired the rights to manufacture and distribute many Cadbury-branded products in the United States. The Cadbury creme eggs sold in the United States are imported by Hershey from Cadbury in the United Kingdom.[23] In 1996, Hershey purchased the American operations of the Leaf Candy Company from Huhtamäki.On July 25, 2002 it became public knowledge that the Hershey Trust Company was seeking to sell its controlling interest in the Hershey Foods Corporation. The value of Hershey stock skyrocketed 25% with over 19 million shares trading that day. But over the following 55 days, widespread press coverage, as well as pressure from Pennsylvania Attorney General Mike Fisher, the Community of Hershey, and Dauphin County Orphans' Court Senior Judge Warren G. Morgan, led to the sale being abandoned. The seven Hershey Trustees who voted to sell Hershey Foods on September 17, 2002, for US$12.5 billion to the William Wrigley Jr. Company were removed by Attorney General Fisher and Judge Morgan. Ten of the 17 Trustees were forced to resign and four new members who lived locally were appointed. The former Pennsylvania Attorney General, LeRoy S. Zimmerman, became the new Chairman of the reconstituted Milton Hershey School Trustees. Mr. Zimmerman has publicly committed to having the Milton Hershey School Trust always retain its interest in The Hershey Company. If Hershey is sold, the rights to make and market Kit Kat and Rolo products in the U.S. would revert to Nestlé.In December 2004, Hershey acquired the Mauna Loa Macadamia Nut Corp. from The Shansby Group.[24]In July 2005, Hershey acquired the Berkeley, California based boutique chocolate-maker Scharffen Berger.[25] In November 2005, Hershey acquired Joseph Schmidt Confections, the San Francisco based chocolatier, and a year later, in November 2006, Hershey acquired Dagoba Organic Chocolate, a boutique chocolate maker based in Ashland, Oregon.Hershey's chocolate is available across the United States, due to their wide network of distribution.[26] They have three mega distribution centers, with modern technology and labor management systems.[27]
- #16 In January 2010, Kraft purchased Cadbury plc (CBY)for $19 billion. The expanded Kraft, with estimated annual revenues worth more than $50 billion, is now able to reach to larger economies of scale inemerging markets.[3] Additionally, the addition ofCadbury plc (CBY)'s product portfolio allows Kraft to better compete against candy makers like Hershey Foods (HSY) and Mars.
- #17 In January 2010, Kraft purchased Cadbury plc (CBY)for $19 billion. The expanded Kraft, with estimated annual revenues worth more than $50 billion, is now able to reach to larger economies of scale inemerging markets.[3] Additionally, the addition ofCadbury plc (CBY)'s product portfolio allows Kraft to better compete against candy makers like Hershey Foods (HSY) and Mars.
- #19 HERSHEY HAS MARKETING RIGHTS OF KITKAT(NESTLE) AND CADBURY IN U.SCADBURY –acq by KRAFT FOOD
- #23 Variety (every product comes in several different flavour3,300 candy products including variations in sizes and shapes
- #30 This is a link
- #32 HERSHEY'S and Coca-Cola have partnered together to offer strong consumer offers around some of the biggest brands within the C-Store industry. The HERSHEY'S/COKE-ZERO program increases the market basket rings of your average customer and drives incidence towards two of the highest margin categories in the store – candy and cold beverages.HERSHEY'S and Coke have partnered with the NCAA to offer strong bundling promotions that your consumers will love:
- #33 http://www.hersheys.com/CSTORE/consumer-promotions/hersheys-coke-bundle/Default.aspx
- #34 What do consumers crave with coffee when they are looking for a light and wafery alternative to doughnuts? KIT KAT Wafer Bar! The KIT KAT and Coffee program has informed your customers about the great relationship KIT KAT has with coffee through national radio for the past 4 years…and counting.KIT KAT sales since the inception of the program prove the program works! The combination of KIT KAT and coffee's high margins are an instant winner for both consumers and your profits.
- #36 Size (e.g., small sizes to increase trial rate): this is gaining tremendous importance today since the companies, sizes. in a bid to offer chocolates at affordable prices, are reducing their pack
- #38 A convenience store is a small store or shop that may sell items such as sweets, ice-cream, soft drinks, lottery tickets, cigarettes and other tobacco products, newspapers and magazines, along with a selection of processed food and perhaps some groceries. Stores that are part of gas stations may also sell motor oil, windshield washer fluid, radiator fluid, and maps. Often toiletries and other hygiene products are stocked, and some of these stores also offer money orders and wire transfer services or liquor products. They are often located alongside busy roads, in densely-populated urban neighborhoods, at gas/petrol stations or near railway stations or other transportation hubs. In some countries most convenience stores have longer shopping hours, some being open 24 hours.HERSHEY'S Premier Partner Program focuses on the 3 most important elements in driving your Candy sales: Maintaining the right everyday PRODUCT mix, ensuring the best secondary product PLACEMENT, and offering exciting consumer PROMOTIONS.HERSHEY'S Premier Partner Program offers you:1 - Flexible menu based choices so you can design the program best suited to your needs2 - Generous performance incentives of up to an 11% rebate + shipper allowances.3 - Instant rebates on pre-price displays upon delivery
- #42 http://www.asklaila.com/search/Delhi-NCR/-/big%20apple/60?searchNearby=false&v=listing