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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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)
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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.
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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.
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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.
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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.
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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
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Marketing Mix
Appendix a:
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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.
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