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Hershey’s Chocolate Company’s Market Segmentation Report


Introduction

Hershey’s caters to different target markets (Hershey, 2008). The company sells chocolate products. Additionally, the company offers peanut butter products. The company fills the diverse needs of the different target markets. In an experiment where Ferrero and Hershey’s products were alternative choices, most of the participants preferred the Hershey chocolate products (Pujol, 2011). Hershey’s marketing plans ensure filling the unique needs of each market segment.

Hershey Company

Hershey’s packaging strategy creates a higher demand for its products in different market segments (Hartline, 2011). The main products may include several ingredients. One ingredient is Cacao. Another ingredient is cocoa powder. A third ingredient is chocolate liquor. The Hershey’s brand includes Hershey’s Kisses, Reese’s Whipps, and Reese’ Peanut Butter Cups (Hershey, 2008). The company’s new products include Bliss chocolate. The product is expected to be a best seller (Dorfman, 2008).

Further, the market segment includes weight watchers. The patrons are conscious of their weight. They eat lower-calorie products. Consequently, Hershey’s sells low-calorie chocolates to this market segment. For example, Hershey’s Reese’s Whipps chocolate contains reduced fat content. On the other hand, Hershey’s Reese Select Clusters targets current and future customers who prefer higher chocolate calorie content (Hershey, 2008). Clearly, Hershey’s focuses on the weight watchers market segment.

Major Competitors

Hershey’s Chocolates has several competitors. One of the competitors is Mars. Mars sells the popular Snickers Charged, Dove Beautiful, and M & M Premiums. Russell Stover is another competitor. The company sells Whitman’s Soho. Nestle sells Butterfinger chocolate (Hershey, 2008).

The relevance of segmentation to Hershey’s Segmentation is relevant to Hershey’s continued dominance of the chocolate and peanut butter business (Daft, 2011). By focusing its marketing campaign on each targeted market segment, the company fills the needs of the segment. Hershey advertises low-calorie products to the weight watchers market segment. Hershey offers heart-shaped chocolates as expressions of love on Valentine’s Day. Hershey offers egg-shaped Reese’s peanut butter products during Easter celebrations (Hershey, 2008). By filling the needs and wants of each market segment, the market segments’ demand for the company’s products will automatically increase.

Hershey’s Market Segment Plans

The company plans to continue supplying the needs and wants of each market segment (Ferrell, 2010). The products are made to fill the chocolate demands of the United States market segment (Hershey, 2008). The products contain peanut butter, filling the wants of the peanut butter customers. The company continues to sell its products in popular distribution centers, especially the top-selling convenience stores and supermarkets. The company introduces new brands to the global market. Surely, Hershey’s profitably plans to continue filling the chocolate and peanut butter needs of its current and future customers.

In terms of geography, Hershey’s targets the United States market segment (Nutt, 2010). The segment includes selling to all current and future customers within the nation. In terms of prior sales outputs, Hershey’s had dominated the United States market segment (Hershey, 2008). The company expanded its operations to cover the global chocolate market. Currently, Chocolate is sold in many countries. Surely, Hershey’s is catering to the global chocolate and peanut butter market segment. In terms of Table 1, the United States market segment, the Hershey Company’s flag carrier is Hershey’s kisses (Hershey, 2008). It is followed close behind by Hershey’s Reese’s peanut butter brand. The above market segment table shows that Hershey products generated 43 percent of the United States market. Next, Mars’ products, which include the M & M brand, generated a lower 25 percent of the United States market segment. The Nestle brand got only 8 percent of the United States market segment. The combination of the other competitor brands generated a 24 percent market segment. Clearly, Hershey effectively markets its products to be the top grosser in the United States market segment (Weihrich, 2009).

Chocolate Brand Market Segment Sales Ranking (2007)

In terms of table 2, one of Hershey’s market segments is the Kiss chocolate brand (Hershey, 2008). In terms of the Chocolate Brand market segment, statistics will indicate Hershey is not the top grosser. The M & M chocolate ranked first. Next, Hershey’s kisses chocolate followed close behind. Hershey’s Reese’s peanut butter got 3rd place. Mars’ Snickers chocolate landed at 4th place. The Crunch chocolate brand placed in 5th place. Nestle’s Butterfinger chocolate landed at the last place. Undoubtedly, M & M Chocolate is the most popular chocolate brand.

Market Segmentation

Distribution Center Market Segment In terms of table 3, Hershey’s ventures into the distribution center market segment (Moyer, 2009). In terms of the above-market segment, Supermarkets and convenience stores are the top two sellers of Hershey’s products (Hershey, 2008). Next, the Wal-Mart store sales output is placed at 3rd rank. The drug store sales output of Hershey’s products is pegged at 4th rank. The Warehouse club sales output of Hershey’s products is put at 5th rank. Evidently, selling Hershey’s products in supermarkets and convenience stores will generate the most product sales outputs. Further, the market segment includes lovers. The advertisements persuade the viewers to use kisses chocolates as a symbol of love (Hershey, 2008). By giving the woman a kisses chocolate, the male lover can win the heart of the woman. Hershey’s famous tag line is “say it with a kiss”. The kiss word means that male should give the kisses chocolate to the other person, his love interest. Surely, Hershey’s appeals to the lover’s market segment (McDonald, 2012).

Furthermore, Hershey’s Reese brand caters to clients who prefer peanut products. The Reese peanut butter contains the health nut and butter ingredients. Some customers prefer peanut butter products. Other prospective customers hate peanut ingredients. Vividly, Reese caters to the peanut butter customer market segment.

Additionally, the company can also cater to a unique market segment, customers who love to gamble. In a previous Hershey Kisses advertisement, the viewers were enticed to find specially marked kisses chocolates. Customers who found the speci marked kisses were given a big prize. The prize included $100,000. The same price also included an all expendable-expectation trip to New York. The vacation trips also included Caribbean Cruise tours. Other minor winners won several boxes of Hershey’s kisses. Clearly, Hershey’s kisses chocolate fills the chocolate needs of the gambling market segment (Burkard, 2011).

Moreover, Hershey’s Reese butter products were tied to the movie The Dark Knight. The customers who found certain marked Reese butter products won a prize. The prize included a home theatre. Other Reese prizes included a free motorcycle. Other Reese product winners got The Dark Knight movie’s memorabilia (Hershey, 2008). Evidently, the Reeseroducts cater to The Dark Knight movie market segment.

Furthermore, the Hershey Company’s Reese peanut butter product caters to the Easter egg market segment (Mohr, 2010). The products were made in the shape of Easter eggs. Since Easter is a popular holiday activity, children love the egg-shaped Reese peanut butter products. Undoubtedly, Reese’s products fill the Easter egg market segment’s needs.

Additionally, the Hershey Company’s Reese butter products cater to the ValentineValentine’segment. February is the month of love. February 14 is the day for lovers. The company persuades the lovers to give the Hershey products, especially the Reese peanut butter products, to their loved ones. The sweet taste of the Hershey products is enough to melt any refusing heart (Hershey, 2008). Surely, Reese supplies the needs of the Valentines market segment.

Consumer Preference Market Segment

In terms of table 4, Hershey’s fills the needs of the consumer market segment (Reid, 2009). Hershey’s products generated 6 percent consumer preference. M & M generated 5 percent of the consumer preference. Snickers’ generat.6 percent preference. Reese’s generated 3.5 percent consumer preference. Butterfinger produced a 2 percent consumer index (Hershey, 2008). Evidently, Hershey’s Kisses is the most popular consumer chocolate preference.

Hershey Brand Gender Market Segment

In terms of table 5, Hershey’s targets the gender market segment. The company caters to both the male and the female genders. In terms of gender, there is a difference between Hershey’s male and female customers. In terms of Hershey’s kisses chocolate product, 84 male respondents prefer kisses products. On the other hand, 115 female customers prefer Hershey kisses products (Hershey, 2008). Compared to male customers, more female customers prefer Hershey’s kisses products. In terms of Reese’s peanut butter, there is also a variance between male and female customers. There were 102 male customers who preferred the peanut butter. On the other hand, there were 98 female customers who liked the peanut butter product. Compared to female customers, more male customers prefer Reese peanut butter products.

Adult Market Segment

In terms of table 6, Hershey’s entered the adult market segment. The above table shows that M & M chocolate is the most popular adult preference. Hershey’s Kisses chocolate follows close behind at 2nd place. The Snickers product is the 3rd most popular adult chocolate brand. Reese’s peanut butter product is the 4th most popular product. Nestle’s Butterfinger is at 5th rank (Hershey, 2008). Surely, M & M chocolate is the most popular adult market segment brand. Age Market Segment

In terms of table 7, Hershey’s ventured into the age market segment. In terms of kisses, people belonging to the 45-54 years age bracket have the highest demand for Hershey’s kisses. Next, people belonging to the 55-64 years age bracket followed close behind, 2nd place. The customers belonging to the 65-74 years age bracket have the 3rd highest demand for the kisses chocolate. Customers from the 18-24 years age bracket have the 4th highest demand for the Hershey kisses. Clients from the 35-44 years age bracket have the 5th highest preference for kisses chocolate (Hershey, 2008).

Clearly, customers belonging to the 45-54 age group has the highest preference for the Kisses chocolate brand. In terms of table 8, Hershey’s Reese product ventured into the age market segment. People belonging to the 35-44 years age bracket have the highest demand for Hershey’s kisses. Next, people belonging to the 25-34 years age bracket followed close behind, 2nd place. The customers belonging to the 18-24 years age group have the 3rd highest demand for the kisses chocolate. Customers from the 45-54 years age group have the 4th highest demand for the Hershey kisses. Clients from the 55-64 years age group have the 5th highest preference for kisses chocolate (Hershey, 2008). Undoubtedly, clients from the 35-44 age bracket had the highest preference for Reese’s peanut butter products

Interpretation The above discussion clearly shows Hershey’s dominance of the chocolate and peanut butter market segment (Hershey, 2008). The company created products that catered to several market segments (Sharples, 2012). Each market segment loved the taste of both the Kisses chocolates and the Reese peanut butter. The products contain the calorie needs of weight watchers. The product fills the sweet product needs of all market segment participants. The products have something to offer to the different target markets. Each age group has several chocolate and peanut butter preferences. Hershey’s fills the needs of the unique market segments (McLinden, 2011). Without a doubt, Hershey’s clearly dominates the chocolate and peanut butter market segment. Conclusion.

Based on the above discussion, segmentation is relevant to Hershey’s leading the chocolate and peanut butter business. By filling the changing needs and wants of each market segment, the market segments’ demand for the company’s products will continue to rise. Consequently, Hershey is one of the top sellers in the United States, gender, age and other market segments. Evidently, sel, ling the Hershey’s products in supermarkets convenience stores generated the highest Hershey product demands. Vividly, Reese fills the peanut butter customer market segment. Evidently, the Reese’s products fill the peanut butter of The Dark Knight movie market segment. Without a doubt, the Reese’s peanut butter supplies the neef the Easter egg market segment and Valentines’ Day market segment. Evidently, Hershey’s Kisses is the most popular preference. Overwhelmingly, Hershey Company’s strategic marketing plans guarantee to supply the diverse needs and wants of each market segment.

References:

Burkard, N. 2011, Market Segmentation and Branding, Grin Press, New York. Daft, R. 2011, Management, Cengage Learning, New York. Dorfman, B., 2008, Hershey Puts Faith in Bliss to Recapture Market Share, Los Angeles Times, Los Angeles.

Ferrell, O. 2010, Marketing Strategy, Cengage learning, New York. Hartline, M. 2011, Marketing Strategy, SouthWestern Press, New York.

Hershey, 2008, Advertising Research Report, Hershey, New York.

McDonald, M. 2012, Market Segmentation, J. Wiley & Sons New York.

McLinden, G. 2011, Border Management Modernization, World Bank New York. Mohr, J. 2010, Marketing of High-Technology Products, Mohr Press New York.

Moyer, R. 2009, Contemporary Financial Management, Cengage Learning New York.

Nutt, P. 2010, Handbook of Decision Making, J. Wiley & Sons New York. Pujol, N. 2011, The Mind Share Market, Pujol Press New York.

Reid, R. 2009, Hospitality Marketing Management, J. Wiley& Sons New York.

Sharples, L. 2012, Food and Wine Festivals and Events, Routledge Press New York. Weihrich, H. 2009, Management, McGrawHill Press New York.

Appendix

Table1. United States Market Segment.

Competitor Percent of total Sales (2006) Rank
Hershey 43 percent 1st
Mars 25 percent 2nd
Nestle 8 percent 4th
Others combined 24 percent 3rd

Table 2. Chocolate Brand Market Segment Sales Ranking (2007).

Chocolate Brand Hershey’s Kisses Snickers Reese’s Peanut Butter Cup Crunch M & M Butterfinger
Sales Rank 2nd 4th 3rd 5th 1st 6th

Table 3. Distribution Center Market Segment.

Distribution Center Sales $ Billions Percent Market Estimate Rank
Supermarkets $ 5 15 percent 1st– 2nd
Walmart $3.5 11 pecent 3rd
Convenience Stores $4.5 15 percent 1st– 2nd
Drug Stores $3.0 9 percent 4th
Warehouse Clubs $2.0 8 percent 5th
Vending Machines $1.0 4 percent 6th

Table 4. Consumer preference.

Product Hershey’s Kisses Mars’ M & M Mars’ Snickers Hershey’s Reese’s Peanut Butter Nestle’s Butterfinger
Preference Rate 6 percent 5 percent 3.6 percent 3.5 percent 2 percent
Rank 1st 2nd 3rd 4th 5th

Table 5. Hershey Brand Gender Preferences.

Hershey Brand Male Female
Kisses 84 115
Reese’s peanut butter 102 98

Table 6. Adult market segment (2006).

Brand Hershey’s Kisses M & M’s Snickers Reese’s Peanut Butter Nestle’s Butterfinger Nestle Crunch
Rank 2nd 1st 3rd 4th 5th 6th

Table 7. Hershey Kisses : Age market segment (2006).

Age 18-24 yrs 25-34 yrs 35-44 yrs 45-54 yrs 55-64 yrs 65-74 yrs
Purchase Index 101 87 97 110 107 104
Rank 4th 6th 5th 1st 2nd 3rd

Table 8. Hershey’s Reese Peanut Butter: Age market segment (2006).

Age 18-24 yrs 25-34 yrs 35-44 yrs 45-54 yrs 55-64 yrs 65-74 yrs
Purchase Index 116 118 126 92 87 70
Rank 3rd 2nd 1st 4th 5th 6th
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IvyPanda. "Hershey's Chocolate Company's Market Segmentation." October 1, 2020. https://ivypanda.com/essays/hersheys-chocolate-companys-market-segmentation/.

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