MKG701: Analyzing Hershey's External Marketing Environment

This report delivers an external marketing environment analysis of The Hershey Company, focusing on Hershey's Kisses Chocolate. It examines the organizational structure and external marketing environment, highlighting key opportunities such as lower prices and expansion into emerging markets, and threats like high cocoa prices and strong competition from companies like Nestle and Cadbury. The analysis considers political, economic, social, technological, environmental, and legal factors affecting Hershey's marketing strategies. The report concludes that while Hershey's marketing management is effective, the company must address competitive pricing and market diversification to maintain its position in the chocolate industry. Desklib is your go-to platform for accessing similar solved assignments and comprehensive study resources.

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Marketing Management

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Executive summary
The Hershey Company prides itself as being the largest manufacturer of chocolate and
confectionery products in North America. Kisses chocolate has the unique taste and ability to
satisfy health conscious people. The organizational structure and the external marketing
environmental analysis have been described in this report. However, company is worldwide
famous but there are some threats which can be reason for low competitive advantages. The key
opportunities and threats have been elaborated in an appropriate manner.

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Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Case Background.............................................................................................................................5
Theoretical Background...................................................................................................................7
Environmental Analysis...................................................................................................................8
Summary of opportunity and threats..........................................................................................10
Identification and assessment of opportunities and threats...........................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
Appendix........................................................................................................................................14

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Introduction
Marketing management is the effective process of developing strategies and planning to reach
the desired customer segment. The purpose of this report is to conduct the environmental
analysis on company. The importance of external marketing environment analysis will be shown
in this assignment. Hershey’s Chocolate Manufacturer Company is chosen to accomplish this
task on which environmental analysis will be done on its particular product. Opportunity is the
scope of expanding business in an appropriate manner which will be described in the context of
Hershey Company. There are various competitors of this company that develops superior
lighting system and being the cause of threat.

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Case Background
Hershey is the major producer of quality chocolate in North America. It is considered as the
global leader in chocolate and sugar confectionery. It is founded in 1894 by Milton Hershey as
the Hershey Chocolate Co (Berger, 2016). The organizational structure of this company is
effective and it includes the formation of U.S. commercial with the responsibility to create
Hershey’s Leadership while capitalizing on its scale in the market of United States. The range of
its product is affordable as it produces different kinds of chocolate for different occasion. The
target customer of this company is teenagers, the children, professionals and old ones as well.
The competitor target of Hershey is Cadbury and Toblerone because their targets are the similar
as the Hershey’s target market.
Figure 1: organizational Chart
Source: (Kurie, 2018).

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Specific product
Hershey provides chocolate to them who are health conscious that is why Hershey’s Kisses
Chocolate in the mind of customers as being a healthy alternative. It had increases the popularity
of the brand and sales by 10% in the market of U.S. within 6 months (Hershey, 2015).

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Theoretical Background
External marketing environment analysis and its importance
External environmental analysis is considered as the strategic tool which helps to recognize the
external elements which may influence the performance of the organization. It is important for
the organization to keep business out of the competition. The high authority of the organization
must regularly amend their strategies to reproduce the environment in which their business
operates. It is considered as a useful implement to do an external analysis at the beginning point
of the strategy review process (Kotler, 2015).
Relevant environments for Kisses Chocolate
The relevant environments of Kisses Chocolate are political, environmental, economical,
technological, social and legal. These are important for Kisses Chocolate because it helps to
define the situation of political stability, laws and legislation of different country which may be a
concern for the organization, usage of advanced equipment and acceptance of people for
healthier chocolates.

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Environmental Analysis
Competition: Hershey’s Kisses Chocolate is effective as it helps to low the blood pressure and
available in the market at affordable prices in comparison of other healthy products. The major
competitor of it is Cadbury, Toblerone and Xocai. The two critical issues is taste and design as
its competitor provides effective packaging and different taste to its customers (Toedt, 2014).
Economic growth and stability: the economic growth and the stability of the chocolate can be
affected by gasoline because due to increase rate of gasoline, the chocolate factory will be
affected in multiple ways. It creates additional cost for the chocolate industry and will infuecne
the sales and margins.
Political trends: it is necessary for the company to have the political stability of countries where
it does business. The major issue for Kisses Chocolate can be the political stability and national
minimum wage and Corporation Tax (Woon, 2017).
Legal and regulatory issues: it is vital for the company to must take in to consideration export
and import tariffs while searching suppliers of sugar and cocoa. The two issues can be refused to
obey labor laws concerning age, wage and different working conditions and defy to food and
safety regulations regarding ingredients and production which can be different from country to
country.
Technological advancements: Hershey Company has adopted latest technology advancements
in making chocolates for the customers. Kisses Chocolates is made up of healthy a ingredient
which is good for health. The modern milking machine is used to reduce the labour costs. The
major concern of this aspect is lack of support of Nongovernmental Organizations (NGO) and

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Local Government Support to establish more machines and due to lack of education farmers are
unable to operate new technologies (Martín-Peña, Díaz-Garrido and Sánchez-López, 2014).
Socio-cultural trends: the preferences of customers are changing constantly towards chocolate.
The two issues of this aspect are demand of greater variety of chocolate product and different set
of practices and culture of population (Ovchinnikov, Mamychev and Mamycheva, 2015).

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Summary of opportunity and threats
The key opportunity for this product is lower prices than other healthy food products and it can
reach new markets due to its effective ingredients in Kisses Chocolate. The key threat is high
quality cocoa which increases the price of chocolate.
Identification and assessment of opportunities and threats
Opportunities
United States is considered as the mature market that has no longer promises important business
growth for Hershey. Hershey can expand its business of Kisses Chocolate to emerging markets
like China and India which is the world’s largest population countries (Johanson and Mattsson,
2015). Due to healthier chocolate, the demand of Kisses chocolate is huge in the market which
provides opportunity to look forward to enlarge its organize chocolates and dark chocolates with
the enhancing preferences for healthier chocolates.
Threats
Hershey is entirely dependent on the US market for sales, it will ultimately lose market share to
its competitors in the confectionery market. The major competitor of Hershey is Nestle that has
expanded its business over more than 80 countries (Hershey, 2013). Hershey is dependent on
commodities such as sugar, cocoa, dairy products and sugar for manufacturing Kisses chocolate

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and the prices of these products are increased significantly during recent year. It has to be ready
for adopting competitive pricing strategies.
Conclusion
It can be concluded that marketing management of Hershey Company is effective as the impact
of external marketing environment can influence the marketing strategies of company. Hershey’s
Kisses Chocolate has been chosen as a specific product of the company. Opportunity and threats
in the context of specific product have been mentioned in an adequate manner. It has been found
that the competition is high in the chocolate industry as there are established companies that
offer variety in products.

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References
Berger, T.A., 2016. Presenting a framework and process for designing leadership development
programs as sustainable competitive advantages: A case study at Hershey Entertainment and
Resorts. Indiana University of Pennsylvania.
Hershey, 2013.Overview. [online] Available at: Accessed on 14th April, 2018.
Hershey, 2015. Hershey Simplifying Structure Along With Its Chocolate [online] Available at: .
Accessed on 14th April, 2018.
Johanson, J. and Mattsson, L.G., 2015. Internationalisation in industrial systems—a network
approach. In Knowledge, Networks and Power (pp. 111-132). Palgrave Macmillan, London.
Kotler, P., 2015. Framework for marketing management. Pearson Education India.
Kurie, P., 2018. In Chocolate We Trust: The Hershey Company Town Unwrapped. University of
Pennsylvania Press.
Martín-Peña, M.L., Díaz-Garrido, E. and Sánchez-López, J.M., 2014. Analysis of benefits and
difficulties associated with firms' Environmental Management Systems: the case of the Spanish
automotive industry. Journal of Cleaner Production, 70, pp.220-230.
Ovchinnikov, A., Mamychev, A. and Mamycheva, D., 2015. Sociocultural bases of state-legal
development coding. Mediterranean journal of social sciences, 6(3 S4), p.67.
Toedt, M., 2014. The Development of a Response-Function for Customer Relationship
Marketing. International Journal of Business and Management, 2(2), p.105.

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Woon, W., 2017. Impact of political trends on civil society. In Civil Society and the State in
Singapore (pp. 71-86).

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Appendix
Figure: Hershey’s Kisses Chocolate
Figure 2: Chocolate Market Share