Professional Documents
Culture Documents
Tran Yen Trang - 23853854 - AS2 - MKT3040-2
Tran Yen Trang - 23853854 - AS2 - MKT3040-2
MKT3040
Student’s name: Tran Yen Trang Lecturer: Ngo Hoang Quynh Anh
Class: F-UON-M3D UON’s ID: 23853854
FTU’s ID: 2005293110 FTUbdhbhdsb
[Company name] | [Company address]
Contents
Executive Summary...........................................................................................................2
1.0 Introduction..................................................................................................................3
4. Micro Analysis................................................................................................................6
4.2 Customers...................................................................................................................7
4.3 Suppliers.....................................................................................................................7
5. Competitive analysis......................................................................................................8
6. SWOT............................................................................................................................11
References:.......................................................................................................................14
1
Executive Summary
This report analyzes Hershey's role in the US confectionery and snack market, aiming to
identify key focus areas for the upcoming fiscal year. Using a PEST framework, we
examine external factors such as the economic landscape and health-conscious consumer
trends influencing Hershey's strategies. Internally, we explore Hershey's success factors
through Kotler's framework, considering product innovation and supply chain
efficiencies. The competitive landscape, including rivals like Mars and Mondelez, is
highlighted through a SWOT analysis, leading to strategic recommendations. These
include investments in R&D for innovative products, emphasis on health-conscious
choices, and leveraging digital channels for marketing and sales.
2
1.0 Introduction
3
2.1 Current Market Analysis
Hershey continues to maintain a strong presence in the US confectionery market.
According to market research, Hershey held a significant market share of approximately
31.2% in the US chocolate confectionery segment in 2022 (Statista, 2023a). The
company's strategic focus on product innovation and consumer preferences has
contributed to its sustained success, with a reported annual revenue of $8.8 billion in the
fiscal year 2022 (The Hershey Company Annual Report, 2022). In response to evolving
consumer trends, Hershey has also made noteworthy strides in e-commerce, leveraging
digital channels to enhance its market reach. With a legacy dating back over a century,
Hershey's ability to adapt to changing market dynamics while upholding its commitment
to quality has solidified its position as a leader in the contemporary US confectionery
market.
4
3.2 Economic Factors
Economic factors play a crucial role in shaping the macro environment for Hershey. Key
indicators such as GDP and inflation significantly impact the confectionery industry and,
consequently, Hershey's operations. For instance, the overall economic health of a region,
reflected in its GDP growth, can influence consumer spending patterns. According to the
World Bank, the global GDP growth rate was 3.6% in 2022, signaling post-pandemic
recovery (World Bank, 2022). A robust GDP often correlates with increased consumer
purchasing power, positively affecting Hershey's sales.
Inflation is another economic factor that bears relevance to Hershey's business. Inflation
rates can impact production costs, including raw materials and distribution expenses. For
example, rising inflation may result in increased prices for commodities like cocoa, a key
ingredient for Hershey's products. Monitoring and adapting to inflation trends are critical
for Hershey to maintain profit margins and competitiveness. In 2022, the United States
experienced an inflation rate of 6.5%, impacting various industries, including food and
beverage (US Inflation Calculator, 2022).
5
demand for sustainably sourced products, aligning with Hershey's commitment to
sustainability.
4. Micro Analysis
4.1 The company
In the micro analysis of Hershey, the company exhibits a robust position in the
confectionery industry. Hershey's annual revenue for the fiscal year 2021 was reported at
$8.8 billion, showcasing the company's substantial market presence (The Hershey
Company Annual Report, 2022). Hershey's mission centers on providing delightful
moments to consumers through the creation of high-quality, indulgent treats at accessible
prices. The company's commitment to this mission is reflected in its diversified product
portfolio, including iconic chocolate bars, candies, and snacks, catering to a broad
consumer base. Hershey's vision emphasizes a focus on global growth and expansion,
leveraging innovation and strategic acquisitions. The company's strategic initiatives, such
as the Cocoa for Good program, underscore Hershey's dedication to sustainability and
ethical sourcing in its supply chain (The Hershey Company, 2022). Hershey's consistent
6
financial performance, coupled with a mission and vision aligned with evolving
consumer values, positions the company as a key player in the confectionery market,
poised for sustained growth and adaptation to industry trends.
4.2 Customers
Hershey's customer persona encompasses a diverse demographic, catering to both young
and mature consumers with a range of products. According to market research, Hershey
holds a substantial market share in the US chocolate confectionery segment, amounting
to approximately 25% in 2021 (Statista, 2023c). The customer avatar for Hershey spans
various preferences, including those seeking classic indulgences, health-conscious
individuals gravitating towards better-for-you options, and environmentally conscious
consumers interested in sustainably sourced products. The company's strategic response
to evolving consumer needs is evident in its product innovation, with an emphasis on
introducing healthier alternatives and sustainable practices. This customer-centric
approach aligns with contemporary market trends, contributing to Hershey's resilience
and prominence in the confectionery industry. The diversified customer persona
underscores Hershey's adaptability to changing consumer preferences and positions the
company for continued success in capturing a broad market share.
4.3 Suppliers
Hershey collaborates with a network of suppliers globally to source key ingredients, with
cocoa being a primary focus. These collaborations are further demonstrated in The Cocoa
for Good program, launched by Hershey, reflects the company's commitment to
sustainable and responsible sourcing practices. The Hershey Company has made a
dedicated pledge to procure cocoa for its chocolate products from certified and
sustainable sources, aiming to reach 100 percent compliance by the year 2020. By the
close of 2018, Hershey successfully attained 80 percent cocoa sourced through certified
and sustainable means, staying on track to fulfill its commitment of reaching 100 percent
by 2020 (The Hershey Company, 2022). This initiative aims to address social and
environmental issues within the cocoa supply chain, showcasing Hershey's dedication to
7
ethical supplier relationships. As of 2022, Hershey reported working directly with over
37,000 cocoa farmers globally to enhance productivity and promote sustainable farming
practices (The Hershey Company Annual Report, 2022). The company's emphasis on
supplier diversity and responsible sourcing aligns with evolving consumer expectations
for ethical and transparent business practices. This strategic approach to supplier
relationships contributes to Hershey's ability to maintain a consistent supply of high-
quality ingredients while addressing broader industry challenges related to sustainability
and social responsibility.
5. Competitive analysis
8
Hershey tends to be perceived as more affordably priced than Mars, presenting an
enticing option for consumers seeking both quality and cost-effectiveness. Ferrero,
renowned for its premium offerings such as Ferrero Rocher, often adopts a higher price
point, targeting consumers seeking a more luxurious chocolate experience. In
comparison, Hershey appeals to a broader demographic by offering a balanced
combination of quality and affordability, catering to both discerning and budget-
conscious consumers. This nuanced pricing strategy enables Hershey to maintain a
favorable position in the confectionery market, capturing a diverse and wide-ranging
consumer base.
9
5.2 Competitor evaluations
Strengths
Brand Globally recognized brand with Known for premium and luxurious
Recognition broad appeal chocolate offerings
Weaknesses
Health-
Conscious Some products may be seen as Premium positioning may limit
Trend high in sugar mass-market appeal
10
Criteria Mars Ferrero Rocher
6. SWOT
Strengths Weaknesses
11
at $3.9 billion, showcasing its robust 2021). Managing this dependency is crucial
market presence. for cost stability and sustained profitability.
Opportunities Threats
12
7.0 Strategic Priorities
13
References:
1. BrandDirectory. (n.d.). Food & Drink 2023 | The Annual Brand Value Ranking.
Retrieved from https://brandirectory.com/rankings/food/. [2023, December 11].
2. Center for Food Safety and Applied Nutrition (CFSAN), FDA. (2023, January
19). Summary of changes in the 2022 FDA Food Code. Retrieved from
https://www.fda.gov/food/fda-food-code/summary-changes-2022-fda-food-code.
[2023, December 12].
14
7. Statista. (2023b, June 27). Offline/online revenue share in the U.S. confectionery
market by channel 2017-2025. Retrieved from
https://www.statista.com/forecasts/1384392/confectionery-market-revenue-share-
by-channel-in-the-us. [2023, December 11].
8. Statista. (2023c). Chocolate market share of U.S. companies 2021. Retrieved from
https://www.statista.com/statistics/238794/market-share-of-the-leading-chocolate-
companies-in-the-us/#:~:text=The%20Hershey%20Company%20was
%20the,Mars%20as%20a%20significant%20competitor. [2023, December 11].
9. Statista. (2023d, September 19). Healthy snacks: market value worldwide 2021-
2030. Retrieved from https://www.statista.com/statistics/1317251/healthy-snacks-
market-value-worldwide/#:~:text=The%20global%20healthy%20snacks
%20market,annually%20between%202022%20and%202030. [2023, December
11].
10. The Hershey Company. (2022). 2022 annual report. Retrieved from
https://investors.thehersheycompany.com/en_us/home/reports-and-filings/annual-
reports.html. [2023, December 12].
11. The Hershey Company. (2022). Visible progress: Hershey’s Cocoa for good
strategy. Retrieved from
https://www.thehersheycompany.com/en_us/home/newsroom/blog/going-beyond-
fair-trade-with-hersheys-sustainable-cocoa-strategy.html. [2023, December 11].
12. Trading Economics. (2021). Cocoa - price - chart - historical data - news.
Retrieved from https://tradingeconomics.com/commodity/cocoa. [2023, December
11].
15
13. USA TODAY. (2023, October 26). Halloween alert: Test finds many chocolates
contain concerning levels of metals. Retrieved from https://www.usatoday.com.
[2023, December 11].
14. US Inflation Calculator. (2023, December 12). Current US inflation rates: 2000-
2023. Retrieved from https://www.usinflationcalculator.com/inflation/current-
inflation-rates/. [2023, December 12].
15. World Bank. (2022). GDP growth (annual %). Retrieved from
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG. [2023, December
12].
16