Model analysis on hershey's case study

London School of Commerce

Westminster International College

MBA FOR EXECUTIVES
Marketing Management Assignment 1
Model Analysis on Hershey’s Case Study
Lecturer: Dr. Lester Massingham
Tutor: Dr. Eugene Lim

Name: Student ID:

Sara Yeap Th’eng Th’eng 0008VMVM0112

Date of Submission: 14 April 2012

Total Word Count: 4,023

Model Analysis on Hershey’s Case Study April, 2012

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Table of Contents

1.0 INTRODUCTION ...............................................................................................4

1.1 Company Background ......................................................................................4

1.2 Company Mission Statement ............................................................................6

1.3 Hershey’s Product Lists ....................................................................................6

1.4 Market Segmentation ........................................................................................8

1.5 Purpose of study..............................................................................................10

2.0 INDUSTRY ANALYSIS IN MALAYSIA .......................................................11

2.1 Competitors’ Analysis ....................................................................................12

3.0 JUSTIFICATION ON MODEL USED .............................................................18

3.1 Overview of Ansoff Matrix ............................................................................18

3.2 Advantage of Ansoff Model ...........................................................................21

3.3 Limitations of Ansoff Model ..........................................................................21

4.0 EVALUATION, DISCCUSSION & RECOMMENDATIONS .......................22

4.1 Evaluation .......................................................................................................22

4.2 Discussions .....................................................................................................25

4.3 Recommendations ...........................................................................................26

4.3.1 Market Penetration....................................................................................27

4.3.2 Product Development ...............................................................................29

4.3.3 Market Development ................................................................................30

4.3.4 Diversification ..........................................................................................30

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5.0 CONCLUSION ..................................................................................................31

6.0 REFERENCES...................................................................................................33

7.0 APPENDIX ........................................................................................................37

Appendix A – Price, Location & Variety Observation Results............................37

Appendix B – Quantitative Survey Results ..........................................................40

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1.0 INTRODUCTION
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1.1 Company Background

Hershey’s - the American’s favorite chocolate, which was previously known as Hershey Foods

Corporation had been established more than a century in the United States. The name “Hershey”

was bear from the founder, Milton S. Hershey ever since 1894 (Wikipedia, 2012). This brand

was known as one of the largest chocolates manufacturer in the North America with having more

than 12,000 employees across the globe (thehersheycompany.com, 2009). It owned several

renowned brands and few of the popular ones are Hershey’s Bar, Hershey’s kisses, Reese’s or

even Kit Kat, just to mention a few. More notable brands can be seen at below figure.

Figure 1, Major Brands and Product Line (Source: Case Study of the Hershey’s Company, 2008)

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With all these brands, they managed to gain profits and popularity by plotting at least $5 billion

dollars worth of company’s net revenues with net income of $510 million dollars in 2010 just

from the North America. Not to be surprised, Hershey’s actually dominated the Chocolate and

Sugar Confectionery market share in US, topping the chart at 52.8% while Kraft placed the

second, dominating at 48.6% (Warc, 2011). Albeit Hershey’s has global reach, but more than

90% of its revenues came directly from the United States (Zack Investment Research, 2011)

These awesome Hershey’s chocolates

brands could be found in over 50

countries with 60 different brands. Not

only gaining earnings by its infamous

chocolates brands, they too diverted into

different market segments such as food &

beverages, baking ingredients, toppings

and etcetera. (Hershey’s Food

Corporation, 2009).

Figure 2, Hershey’s Products (Source:http://www.CandyBasket.com)

Before Cadbury was acquired by Kraft Foods Inc on January, 2010, Hershey’s had established a

license agreement with Nestle and Cadbury to market several of its own products. Unfortunately,

Hershey’s plans were disrupted when Kraft Foods Inc came into picture with a much higher offer

over acquisition of Cadbury than Hershey’s (Source). The merger of Cadbury and Kraft Foods

had hurt Hershey’s International Growth prospect as Hershey’s was hoping to expand its brands

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through Cadbury’s well marketed solutions worldwide beyond their current marketplace (Zach

Investment Research, 2011).

1.2 Company Mission Statement

Hershey’s has been always striving hard to be number one leader in the American Confectionery

Market by living closely to its mission statement which resonance “Undisputed Marketplace

Leadership” (www.hersheys.com). They strike hard to live with it by turning the consumers’

dreams to reality. (www.thehersheys.com)

1.3 Hershey’s Product Lists

Milk Chocolate Bar Milk Chocolate and Almonds Bar

Special Dark Midly Sweet Chocolate Bar Cookies ‘N’ Crème Bar

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Air Delight Chocolate Bar Drops

Nuggets
Miniatures

Mr. Goodbar Candy Bar Symphony Milk Chocolates Bar

Extra Dark Chocolate Sugar Free Chocolate Candy

Syrup Baking Pieces

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Cocoa Dessert Toppings

Baking Chocolates

Milk & Milk Shakes

Table 1, Hershey’s Full Range Product List

1.4 Market Segmentation

Recognizing market segmentation in a business is vital as it brings us closer to the potential

customer’s needs as the market has become more diverse and it is rare to gain profits from a

mass market. On top of that, it can be used to identify the growth opportunities too (Nelson C,

2002). Different people have their own different preferences and likings and this is where we

should be focused in marketing our products. To segment a vast market, marketers need to

decide in which areas they need to target. It can be in few categories such as gender, price,

interests, location, religion, income, size of household and more (Wikipedia, 2012).

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Figure 3, Example of Income Segmented Group

Hershey’s had made a smarter move ahead of all its competitors especially Mars in the United

States by targeting on adults instead of children by producing a new product; the Kisses. This

move has been proven significant as it has separated itself from its competitors and translated

them into relevant increased profits and market share (MeanGreen, 2008). Nevertheless, this

strategy did not last long as the market trend started to change as due to high sugar content in

Milk Chocolates production, also with the health conscious market, Hershey’s revenue nearly

went flat in 2007 (Dorfman B., 2008).

To gain recovery from the losses, Hershey’s is currently focusing on producing more new

products to venture into Premium Chocolates and Dark Chocolates market. Latest product from

them is Bliss, which is safe guarding them on the Premium segment. They are putting faith on

Bliss to recapture the market share by incorporating with Starbucks Corp. “It’s key for their

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future in that much of the growth in the chocolate category now is in premium and Hershey

really lacks a presence in that category,” said Morningstar Inc. analyst Mitchell Corwin”

(Dorfman B., 2008).

1.5 Purpose of study

Hershey’s had been doing relatively well ever since the introduction of Premium Chocolates in

the United States but it does not seen happening in Malaysia too. Malaysia is ranked at 24th the

largest cocoa exporter in the world (Lascas J, 2011) and there are simply more than 20 brands of

chocolates could be easily found in the stores, be it imported or local chocolates brands.

The main objective of this study was to study on the market share that Hershey’s belongs to in

Malaysia via two different approaches; observation and quantitative surveys. From there, the

author would able to underline on what Hershey’s is lacking and preventing them to grow in

Malaysia. The second objective was to discuss a certain marketing model’s functionality,

advantages and limitations to determine the suitability of the model used for Hershey’s

marketing plan. Whereas providing solutions and recommendations with the help of the

marketing mix falls on the last objective.

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2.0 INDUSTRY ANALYSIS IN MALAYSIA
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The confectionery industry is huge! It is flooded with hundreds or perhaps thousands over

different brands in the world, we are talking just on chocolates brands if you are wondering.

Since the scope is too wide, we are going to narrow down to only analyze the potential

chocolates and cocoa industry in Malaysia.

As Malaysia is ranked 24th, one of the largest cocoa exporter in the world, it is no doubt that

Malaysia is a potential market for Hershey’s to penetrate (Lascas J, 2011). Yet on the other hand,

the revenues they gained in few the Asian regions such as Malaysia, Thailand, Singapore and

Pakistan are lower compared to other region. This is due to sugar, cocoa and peanut are

perceived as few of the most profitable products in the market, which result to obtaining half of

the market revenues. (Del Mundo, Jose Carl, 2011).

To obtain the most updated information in the current market, the author decided to do some

market research in a couple of the well known hypermarkets and convenience stores in Malaysia.

The selected hypermarkets and convenience stores are mostly based in Klang Valley whereby

the densities of shoppers are higher than other areas (Wikipedia, 2012). There are altogether 3

Hypermarkets and 2 Convenience Stores were being observed. They are the infamous Jaya

Jusco, Carrefour and Cold Storage as the Hypermarkets; MyNews.com and 7-Eleven as the

Convenience Store.

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Certain traits are observed as they play the vital role in identifying the market share Hershey’s

has in Malaysia. Among of them are the packaging, location, variety, types of chocolates

produced (white, dark or milk chocolate) and the ultimate one, the price. As Hershey’s relatively

new in Malaysia’s market, few of a more infamous and general brands were analyzed as the

direct competitors to Hershey’s. A few tables were drawn up to sum up the findings which the

author found prevalent factors which affect the market share of it, which can be referred from the

appendix section.

2.1 Competitors’ Analysis

The reasons of why Hypermarket and Convenience Store are chosen to conduct research instead

of dedicated chocolates stores located in shopping malls such as Candylicious or The Cocoa Tree

are the convenience and easy accessibility. Chocolates specialty stores are normally perceived as

expensive as most chocolates displayed on the shelf are the imported ones, hence lowering the

interests of buyers as price is also one of their main concerns that could be seen in Figure 12.

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Figure 4, No Crowds in The Cocoa Trees Chocolate Store on a Public Holiday in Sunway

Pyramid (Source: Author)

While conducting observations in the mentioned stores, these few brands are found rather

intriguing and attractive compared to Hershey’s in which they are:-

 Cadbury by Kraft Foods Inc.

 Lindt from Switzerland

 Ferrero Rocher

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Based on depicted tables in the Appendix A, a market positioning analysis tool would be

deployed to determine the market position Hershey’s stand in Malaysia. This DNA footprint

consists of 8 criterions to be measured among the competitors and they are nonetheless the:-

 Price

 Location

 Varieties

 Packaging

 Promotion

 Public Awareness

 Taste

 Brand Luxury (Premium)

This tool will be using the scale of 1 to 10, with 1 signifies the lowest score or rather the area of

the product is lacking while 10 signifies the highest score. After plotting each of the competitors’

strengths and weaknesses on the scale, it will be then linked together thus a DNA alike figure

would be seen. The bigger is the DNA footprint is plotted in the figure, the larger market share in

Malaysia they possessed.

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Figure 5 DNA Footprint Marketing Position Tool

As seen in the figure, Hershey’s DNA pattern is somewhat Legends:-

small in comparable with its competitors. There are a few Cadbury

noticeable areas in which Hershey’s could be improved
Lindt
from the analysis above. They are the nonetheless;
Ferrero Rocher
Location which means distribution channel, Promotion and
Hershey’s
Varieties in terms of adding more attributes into existing

products.

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Location:

While Ferrero Rocher is deemed as one of the premium/luxury chocolates, it plays a good role in

being made available in everywhere such as all kinds of convenience stores (small, medium or

large sized) in different packaging and sizes. Hershey’s has a lot of catching up to do with their

distribution channel as it is seen rather low compared to Ferrero Rocher but slightly better than

Lindt, the Switzerland chocolates.

The reason why Cadbury is seen practically everywhere in Klang Valley and they are able to

diversify their products even on beverages market because they practiced localization marketing

strategy in Malaysia. They have a factory (Cadbury Confectionery Malaysia Sdn. Bhd.) in Shah

Alam, Selangor and cost on production and exporting are greatly reduced, thus it also explains

clearly on why their price could be much lower to compare with the rest.

Promotion:

It refers to an incentive used by a manufacturer to induce the trade and/or consumers to buy a

brand and to encourage the sales force to aggressively sell it (Terence A. Shimp, 2000).

Hershey’s in this sense is lacking on a lot of sales promotions in comparable to others. There was

barely any advertisement broadcasted on the media, not even on newspaper to enlighten the

public with their newer products such as Nuggets. Hershey’s was rather quiet in Malaysia to

compare with US. Every month they will have special consumer promotion with slashed down

price of chocolates to promote their products (www.hersheys.com). Cadbury on the other hand

offen includes their latest product with their existing product to have “buy 1 get 1 free concept”.

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Varieties

Having a wide range of the same products mean adding more value to the brand; however it is

not guaranteed profitable. At times, offering greater product variety is usually associated with

higher cost (Draganka and Jain, 2005; Lancaster, 1979). Unlike Cadbury, Lindt and Ferrero

Rocher, Hershey’s offered a very limited range of products in Malaysia. Given the impression

the product management is rather inactive and boring to the public.

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3.0 JUSTIFICATION ON MODEL USED
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After a thorough analysis performed on Hershey’s market share in Malaysia, Ansoff Matrix was

chosen to redefine the Business Strategy in which Hershey’s should be adopted to increase their

revenues and presence in Malaysia. Ansoff Matrix was chosen over the infamous BCG model

because BCG focuses on SBU (Strategy Business Units) more. At this point of time, Hershey’s

had been doing fairly well with its existing products in the United States but not every product

available in the US, available in Malaysia too. Hence, analysis of SBUs of Hershey’s is not

appropriate in this study as the few products that brought into Malaysia were the ones which top

the revenues for Hersheys; the Kisses.

3.1 Overview of Ansoff Matrix
ANSOFF’S GROWTH MATRIX

(Figure 6, Source: Usha CV Haley, Strategic Management in the Asia Pacific, Pg. 249)

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The Ansoff Matrix was introduced by H. Igor Ansoff in 1957 in one of the Harvard Business

Reviews conference. It consists of four main areas built around a two by two matrix, which could

assist business men to decide in which strategies from the four growth quadrants, could provide

opportunity for their product or business to grow (Simister P, 2011).

This matrix takes four potential strategies to grow a business by leveraging new or existing

products via new or existing market (paramouthlearning, 2010). Risks would be increased each

time as we move into a new quadrant be it horizontally or vertically (Manktelow J, 2006). The

four directive strategies are named as follows (Ansoff 1957):

1. Market Penetration

 It is the safest guard to grow a business as it does not involve many resources. This

strategy mainly focuses on increasing the market share by recapturing existing or new

customers with having intense marketing promotions to straighten the customer value

(Simister P, 2011).

 Able to dominate the market by either price reduction strategy or mass promotions to

retain existing customers, competitors’ customers or new customers

2. Product Development

 It lines the second least risky strategy whereby existing product would be replaced

with something greater, be it new packaging or develop similar product with more

variety to choose from. The new products are normally sold to the customers through

existing distribution channels (Simister P, 2011).

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 This strategy involves product innovation, product augmentation and product line

extension to satisfy buyer’s need

3. Market Development

 This strategy gives open up the growth opportunity in new areas or new market with

the same products to different people. For instance, instead of targeting on the same

geographical of people, we could move further in selling our products to oversea, etc

(MindTools.com, 2012).

4. Diversification

 This strategy stands the most risky decision to put into practice as diversification

involves throwing in more resources in putting up new products to the untapped

market (new customers) (MindTools.com, 2012). The new product can be either

related products in an existing market or with totally unrelated products that

unconnected with the existing products and markets (Tutor2u, 2010; Haberfellner,

2009).

 There are several diversification strategies which are broken down to:

o Horizontal Diversification

o Vertical Diversification

o Concentric Diversification

(Source: The National Agency for Innovation and Research in Luxembour, 2008)

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3.2 Advantage of Ansoff Model

One of the most said advantages of the Ansoff Model is the flexibility of defining several

strategies simultaneously (Wood J.C & Wood M.C, 2007 pg.54). It provides simplicity with the

direct 2 by 2 dimensions overview which allowed managers or marketers to start planning their

current or future market and product development with Ansoff Model (Bachmeir K, 2008).

Furthermore, it helps us to identify the full range of choices for expansion in a more customer or

market centric way (socialenterpriseworks.org, 2009). Ansoff matrix is the only model which is

able to provide an insight on diversification strategy especially on the ability of changing brands,

be it acquisition or merger with another competitor.

3.3 Limitations of Ansoff Model

Often said simplicity is only good at giving a head start or a pinch of salt of how the whole

picture looks like. Nevertheless simplicity does not tell us the full details on how to achieve the

planned strategies. It is only measured by two aspects: product and market. It does not take

company’s resource, risk associated with each choice, the extent to which each choice leverages

a company’s core competences into account (Bachmeir K, 2008; Pearson A, 2010). Generally,

Ansoff Model would be best used in conjunction with other notable models such as Porter

Matrix, Gap Analysis, SWOT analaysis, and BCG etc and not isolated, to help think through the

choices (Pearson A, 2010). Recommendations made on the based on the model are not concrete

and lack in depth which disabled us from viewing the whole picture (Papers4You.com, 2009).

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4.0 EVALUATION, DISCCUSSION & RECOMMENDATIONS
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4.1 Evaluation

There were 10 simple questions put up on the Internet and approximately 100 respondents

answered to it. Their opinions and suggestions are essential for this study as the strategies

proposed are mostly evolved to their responds in this survey. However, not every question would

be analyzed and put into the deliberation of the strategies. Detailed questions and results could be

obtained from Appendix B.

Figure 7, Demographic – Gender Figure 8, Demographic – Age Group

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Figure 9, Chocolates Consumption Figure 10, Brands Preferred

Figure 11, Ultimate factors of chosen choice

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Figure 12, Chocolates Benefits Awareness Figure 13, Concern Chocolates Consumption

Figure 14, Reason of chocolates consumption Figure 15, Factors influence in buying decision

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4.2 Discussions

Alarming, Malaysia is the world’s 8th most sugar consumption thus crowning the diabetic charts

in the world whereby every 7 out of 10 Malaysia adults suffer from chronic diseases (Consumer

Association in Penang, 2011). This is really concerning as Datuk Tan Lian Hoe confessed that

“Increased number of obesity and diabetes among youths who are the future leaders of the

country” is her greatest worries in launching the Dutch Lady Malaysia’s “Reduce Sugar”

campaign (malaysiandigest.com, 2011).

As seen in Figure 11 & 12, the public fears to consume chocolates because of diet (health) issue.

A chocolate in contrast, does not play a role in contributing weight and diabetic. In fact, they

bring health benefits instead. Reuter (2012) stated that “People who ate chocolate a few times a

week or more weighed less than those who rarely indulged”. Malaysian Cocoa Board wrote an

article on Cocoa and came out with 6 facts (1998):

i. Chocolate does not cause acne

ii. Eating chocolate does not make you fat

iii. Diabetic people can consume chocolate

iv. Chocolate does not cause dental caries

v. Chocolate does not cause heart disease

vi. Chocolate is an aphrodisiac (intend to improve one’s mood) (Wong SY & Lua PL)

Research showed that there were several issues to be addressed:

1. Brand image of Hershey’s is not convincing enough in the face of competition.

Consumers were not impressed by the lack of promotion and product variety

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2. One of the core products of “Hershey’s Kisses” received over 80% of revenues in US but

received only a small proportion of advertising and promotions pricing.

3. Less than 1/3 of Hershey’s products are available in the stores and they need to be

repositioned.

4. Diet is the main concern among the chocolates lovers and sadly, majority of them are not

aware of the benefits it could bring to them.

5. Many of them consume chocolates as snacks whereas some purchase it for gift purposes

6. Sales/Consumer promotions played at utmost factor in buying decision and Hershey’s is

nowhere seen near there.

7. Many of us have misconception on Chocolates would deteriorate our health but in fact, it

improves on cardiovascular system

4.3 Recommendations

Upon recognizing the problems, solutions and strategies are to be developed via Ansoff Model.

There are two quadrants to be used from the model with the help of 7Ps marketing mix as Ansoff

Model alone will not be able to provide end-to-end solutions.

Market

Existing New
Product Market Penetration Market Development

Existing  Bring in existing  Join forces with Coffee
products from US to Bean/Starbucks to
Malaysia by include Hershey’s syrup
collaborating with a third or baking products for
party manufacturer their confectionery
 Organize a competition products
for Kisses’ straps

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collection and win a trip
to Hershey’s World of
Chocolate to increase
brand image and market
share
 Compose branding song
and slogan to boost
company’s brand
 Continue to produce
small packaging for up-
to-date market trend

New Product Development Diversification

New  New Market Segment on  Venture into mobile
Health/Weight Conscious games in Apple and
group Android platform
 Products could be in
nutrition bars form with
higher cocoa content
(dark chocolate)
 Educate the public on
health benefits reap from
Dark Chocolates

Table 2, Ansoff Matrix Analysis on Hershey’s

4.3.1 Market Penetration

a) Place

 To ease the cost of exporting or building a factory here, Hershey’s could

collaborate with a third party manufacturer to manufacture its chocolates. Of

course the Quality Control of the products is to be monitored by Hershey’s.

 When production cost is low, more existing products sold in US could be

produced and sell in Malaysia’s market to increase their revenues and presence by

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having them on the stores’ racks rather than specialty stores such as KLIA and

Langkawi Duty Free Zone (Both are well known for imported goods but very

costly)

b) Promotion

 They have to invest at least some funds in advertisement to create public

awareness online through Facebook, Twitter or Google +.

 They could have more consumer promotions. For consumer promotions, they can

organize an event or competition by purchasing more Hershey’s kisses for

collectable paper straps from the Kisses. Currently messages such as “I miss you”

or “I love you” could be found on the strap but Hershey’s could produce more

lovely messages and organize a competition from there. Customers are to collect

it and make up a love story from there and the winner could walk away from

grand prizes like a visitation trip to the Hershey’s Chocolate world in US or vise

versa.

 They could look into sales promotions too as perhaps buying 1 large pack of

Hershey’s kisses would free 3 mini bars of Nugget. This strategy will save the

cost of trying to market and promote Nugget product. Letting the customers

themselves taste the product marks the best marketing strategy.

 Composing a fun yet rhythmic songs with a slogan would certainly help

repositioning their brand in the market.

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c) Packaging

 Hershey’s could grab hold of opportunities such as festive seasons in Malaysia.

Malaysia is a multi-national country with more festive seasons to compare to

other country. Packaging of the products could go according to the festive

seasons. They could start experimenting in Malaysia by bringing in the idea of

Easter day, Halloween or Christmas packaging as well as Malaysia is celebrating

it too before starting to venture to other festive seasons such as Chinese New Year

or Hari Raya. Having unique designs for the particular festive would attract

buyers to present them as gifts (Figure 11).

 Continue to produce smaller packaging as it is a market trend right now. As seen

in Figure 11, buyers tend to have chocolates as snacks. With smaller packaging,

consumers need not worry on how to handle remaining chocolates (Euromonitor

International, 2011)

4.3.2 Product Development

a) Product

 New product such as higher cocoa content could be accommodated to new market

segment for Hershey’s. This time round they would be targeting on the health

conscious consumers who are afraid to gain weight yet chocolates indulger.

 Higher cocoa content chocolates tend to taste bitter when sugar content would be

decreased too. In this sense, Hershey’s could produce a product range ranging

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from percentage of cocoa content for selections. For examples, 50%, 60% or even

70% of cocoa content.

 Products could be delivered in form of nutrition bars, perhaps with some mixture

of grain ingredient.

b) Promotion

 Hershey’s could educate the public on the benefits of one chocolate could bring

via social media such as Twitter or Facebook as they are free.

 They might include road shows in the malls to launch the new product with

sampling given to public to try for at least a week to see the benefits reap from

dark chocolate especially on diabetics (sugar level) and cardiovascular system.

4.3.3 Market Development

 To increase their revenues in Malaysia, they could join forces with Starbucks or Coffee

Beans with their bakery products such as Hershey’s syrup or toppings on their

confectionery.

4.3.4 Diversification

 Venture into mobility world by creating some adventure games on Apple and Android

platforms that relate to Hershey’s brand. This strategy would help to create awareness

among the public, especially the children who love cute figures in games, to close the gap

they are losing on the market share. If the games are proven profitable, they could

endeavor into merchandise route.

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5.0 CONCLUSION
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As market evolves, it is no longer product-driven to sustain in the competitive market. In fact,

the customers are the one who controls and determines the product’s life cycle! Stunning but

true, if the product does not fit any purpose in one’s daily life; they would not even consider it

unless it is something extraordinary. To maintain and to pro-long the profitable period of a

period, marketing strategies need to be taught off.

Ansoff matrix indeed helpful in identifying growth opportunity in a business but it does not lay

out what are the precautions steps and strategies in details. However, we can combine analyzed

results from other models to judge whether is it workable with a particular quadrant used. In this

case of Hershey’s, since the presence and market share in Malaysia is low, hence growth

opportunity is vast. Nevertheless, to seize a correct strategy in a correct quadrant is rather

confusing with Ansoff matrix. Although there is a modified, high level of 9-grid matrix, the

difference of each of the quadrant is just between a thin-fined line.

To overcome this confusion, perhaps a fixed Product Life Cycle graph (PLC) and Ansoff matrix

combination model for easier strategy brain storming. Below figure is just a brief idea of how it

looks like, further research needed to prove its usability.

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Figure 16, Brief Model of PLC + Ansoff Matrix

Besides this model, other models such as Promotions + PLC and Building Demand for Product

model could be considered into Hershey’s case study too as they are in need of Promotions and

Demand strategies for their existing products. Overall, this report has met all three objectives

mentioned which are, study on Chocolates Industry on Malaysia, study on Marketing Tools and

provide solutions and recommendations.

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6.0 REFERENCES
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1. Ansoff, I. H. (1957), Strategies for diversification, Harvard Business Review, Vol. 35, No. 2,
p. 113-124

2. Ansoff Matrix (2008) Ansoff Matrix. [online] Available at:
http://portal.tugraz.at/portal/page/portal/Files/i3730/files/Lehre/Controlling%20englisch/Ans
off_Matrix.pdf [Accessed: 12 Apr 2012].

3. Ansoff Model (2011) Growth Strategies: Ansoff Model. [online] Available at:
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4. Authorstream.com (2011) Ansoff Matrix Presentation. [online] Available at:
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7.0 APPENDIX
____________________________________________________________________________________

Appendix A – Price, Location & Variety Observation Results

CADBURY BY KRAFT FOOD INC.

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FERRERO ROCHER

LINDT – SWITZERLAND

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HERSHEY’S

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Appendix B – Quantitative Survey Results

1. Are you Male or Female? Response Percent Response Count
Male 48% 48
Female 52% 52

2. Can you tell me your age group? Response Percent Response Count
0-22 6% 6
23.35 72% 72
36-55 20% 20
56 & above 0 0
N/A 2% 2

3. Do you consume chocolates? Response Percent Response Count
Yes 96% 96
No 4% 4

4. Which brand of chocolates do you prefer? Response Percent Response Count
Hershey’s 20% 20
Cadbury (Kraft Food) 30% 30
Lindt 6% 6
Toblerone 14% 14
Others: 30% 30
 Van Houten
 Godiva x3
 Imported Dark Chocolates
 All of the above
 Reeses (Hershey)
 No specific brand
 Cote d’Or x2
 Any Belgium Chocolates
 Neuhaus
 Ferrero Roche x5

5. Please tell me the ultimate factor of your Response Percent Response Count
chosen brand
Price 2% 2
Taste 76% 76
Packaging (attractiveness) 4% 4
Convenience 0 0
Mixtures of variety flavor 8% 8
Branding Status 8% 8

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Others 2% 2
 Ingredient

6. Your purpose of purchasing chocolates Response Percent Response Count
Daily needs 2% 2
Gifts 18% 18
Snacks 74% 74
Others: 6% 6
 Crave
 All the above x2

7. Are you aware of the possible benefits from Response Percent Response Count
chocolates?
Yes 46% 46
No 54% 54

8. What is your main concern in chocolates Response Percent Response Count
consumption?
Price 40% 40
Diet 46% 46
Others: 14% 14
 Energy
 Sugar content – may lead to diabetes
 Constipation
 Taste
 Interest
 Snacks

9. What other factor will influence you in buying Response Percent Response Count
different brand of chocolates?
Promotion 36.63% 74
Word-of-Mouth 18.81% 38
Advertisement 19.80% 40
Campaign 11.88% 24
Competition 5.94% 12
Convenience (such as delivery) 5.04% 10
Others: 1.98% 4
 Introduce by friends
 Sampling

10. Are you a initiator in purchasing new Response Percent Response Count
product launched in the market? (Definition of
Initiator: A person who often tries out newly

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_________________________________________________________________________________________________________

launched product without influenced by others
by their feed backs and in return will
initiate/persuade others to try it)
Yes 46% 46
No 8% 8
Maybe 46% 46

Source: http://www.surveymonkey.com/s/8YPT9VJ

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Model analysis on hershey's case study

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