BUS5SMM: Sustainable Marketing and Management Practices at Hershey's

This report provides an analysis of Hershey's sustainable marketing and management practices. It begins with an overview of the company, including its product, promotion, distribution, and pricing strategies. A SWOT analysis is presented, highlighting Hershey's strengths, weaknesses, opportunities, and threats within the competitive chocolate market. The report then delves into the company's sustainable marketing principles, focusing on initiatives like sustainable cocoa sourcing and community support in West Africa. While acknowledging Hershey's progress, the report suggests further improvements, such as empowering cocoa farmers and ensuring fair trade practices. The analysis concludes that Hershey possesses a competitive advantage but must continue to enhance its sustainability efforts for long-term success.

Running head: SUSTAINABLE MANAGEMENT AND MARKETING
Sustainable Management and Marketing
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Table of Contents
Introduction:....................................................................................................................................2
Product, Promotion, Distribution and Pricing Strategy of the Organization...................................2
SWOT Analysis of the Organization...............................................................................................3
Sustainable Marketing Principles of the Organization....................................................................5
Scope for Further Improvement of the Principles...........................................................................6
Conclusion:......................................................................................................................................7
References:......................................................................................................................................8

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Introduction:
The report focuses on sustainable marketing and management of Hershey’s. It is an
American company considered as one of the largest chocolate manufacturers across the world
(hersheys.com, 2018). The company has its head quarters in Hershey, Pennsylvania that also
represents home to the chocolate world of Hershey. Miltonn S.Hershey found the company in the
year 1894 as a subsidiary of Lancaster Caramel Company. The report discusses the product,
promotions, distribution and the pricing strategy of the organization. The report also put forward
a SWOT analysis of the company that helps in positioning it against its competitors. There report
also discussion about the sustainable marketing principles of the organizations. There is also an
argument put forward on whether the followed strategy is successful or could undergo
improvement following the other principles.
Product, Promotion, Distribution and Pricing Strategy of the Organization
Product: Hershey’s offers chocolates, syrups and sweet sauces. These products remain
available in different sizes and shapes (hersheys.com, 2018). The conical shapes some of the
Hershey’s chocolates with hand rolled packaging is the reason behind its appeal. The constant
innovation of its products has helped the company grow. Some of the most common products of
the company include chocolates, candies, nuts, caramel, mint, and gum.
Promotion: The promotion of Hershey products is mostly through advertisements
television, billboards and magazine advertisements. The company follows a mission of creating
delicious chocolates that everyone can enjoy (Gekonge, 2013). The milk booster advertisement
of Hershey tries positioning itself as healthy product for the growing kids and acts as substitute

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for the conventional milk powders. The advertisement of Hershey’s spread also follows a similar
approach. The company also has a place for tourist attraction in Pennsylvania, USA and known
as Hershey’s chocolate world. Families and kids visit the place that also acts as promotion for the
company.
Distribution: Hershey manufactures all its products that the consumers can directly buy
from its factory (Patalinghug, 2015). The company also sells its products through the wholesalers
and the retailers. In addition, the company also has three large distribution centre equipped with
modern labor management systems and technologies.
Pricing Strategy: The Company believes in a pricing strategy where they try in
maintaining the consistently hiked price level targeted at the upper class and the foreigners.
However, the Hershey’s kisses sold at affordable prices (hersheys.com, 2018). A 12 oz. bag of
available for only $4 dollars that round of to 21 cents for a single chocolate.
SWOT Analysis of the Organization
Strengths:
1. Largest manufacturer of chocolate: Hershey has a larger presence across the globe
and is the largest manufacturer of chocolates (Kizil et al., 2013).
2. Wider distribution channel: The Company has a distribution channel spread across
sixty countries.
3. Higher ratio of sales: The sales figures of Hershey’s stands at 7.5 billion dollars on
annual basis

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4. Company with higher regard: Amongst the highest regarded companies listed by
Forbes, Hershey stands at 249th position.
5. Have brand equity: The Company ranks at the 94th position amongst the valued
brands of the world with a valuation close to around $7 billion.
6. Ensure Philanthropic Efforts: The Company also undertakes philanthropic activities
towards education through its own schools.
Weakness:
1. Cocoa Purchase: The Company does not use fair trade practices for purchasing cocoa.
Moreover, the purchase is not organized.
2. Limited Expansion: Being an FMCG company the expansion is quite limited to only
sixty countries when the company expected to have covered more.
3. Existence of various Small Players: Existence of regional and small player reduces
the market share of the company.
4. Easier Fake Options: The products of the company are easier to duplicate which is
mostly the case in the developing nations.
Opportunities:
1. Presence of Snack Segment: Besides the chocolate, the company also has a segment
for snacks that ensures diversification (Hutzel & Lippert, 2014).
2. Possibility of Further Expansion: The Company also has scopes for further
expansion since it is one of the most loved brands

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Mondelez
Cargill
Barry Callebut
Hershey
3. Presence of Strong Distribution Network: Hershey’s deals with the chocolate and
hence need the right pull in creating a stronger distribution network.
Threats:
Presence of Higher Competition: Hershey’s faces huge competition in the market for
chocolates. Competitors include Barry Callebut, Cargil and Mondelez.
Decrease in the Margins: Due to the increase in the cost overtime and presence of
stronger completion have reduced the margins of the brand.
Possess Health Awareness: The primary suggestion for health includes the exclusion of
heavy sugar based products from their diet that is leading to a drop in consumption of the
chocolates since they have high sugar base.
Problem with Raw Material: Due to the high consumption of cocoa, procuring its exact
amount not only involves a major cost but also leads to bottleneck in the production.
High Quality
High PriceLow Price
Low Quality

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Figure: Positioning Map for Hershey
Source: (Kizil et al. 2013)
Sustainable Marketing Principles of the Organization
In the course of last couple of years, Hershey has made significant tread in the initiatives
for corporate social responsibility that included sustainable sourcing and improvement in the
basic nutrition for helping the children grow and learn particularly in the West of Africa
(Leonidou, Katsikeas & Morgan, 2013). The company outpaced the milestones for the
achievement of 100 percent sustainable and certified cocoa by the end of 2020. The company set
a higher target for sourcing around 50 percent of the global cocoa from the sustainable and
certified sources by end of 2015. The company also plans to source sustainable cocoa for
exceeding the amount necessary for global production for four most popular chocolate brands of
Hershey. The sustainability work towards cocoa referred to the educational and training
programs that made the production of cocoa an attractive and sustainable vocation for the
farmers of the West Africa. Moreover, the company also undertook a sustainability initiative on
an industry wide basis that has also helped the peers of the company in supporting the farming
and farmer communities for the betterment of long-term production of cocoa.
Scope for Further Improvement of the Principles
Although the company has adopted sustainability initiatives in marketing but there are
still scopes for improvement. Hershey being a $6 billion company having one of the largest
market shares has a better positioning for dramatically improving the conditions of the farmers

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and the workers (Baker, 2014). Presently, the company can implement the following step in case
they are serious about commitment to sustainability and farming communities.
1. Empowering the farmers supplying the chocolates to undertake negotiation of prices
in a collective manner as per their wish that will enable them in taking care of the families, the
workers present on the farm, and the farm in a sustainable manner.
2. Purchasing of cocoa through the fair trade terns from the farmers who are in the FLO-
Cert registry and the as the producers of fair trade. Currently they are unable to sell the entire
cocoa via the fair trade
3. Ensure providing regular, transparent and public updates on the necessary progress
toward the goals and the plans for the future
Conclusion:
To conclude, one can say that Hershey has a competitive advantage over its competitors
in terms of price of products, promotion, pricing strategy and distribution. The analysis of its
SWOT gives it an edge over some of its competitors. The company not only makes it products
available to the all the sections of the society but also tries to keep its employees happy. Hershey
sells its products across sixty countries and is a member of World Cocoa Foundation.

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References:
Baker, M. J. (2014). Marketing strategy and management. Palgrave Macmillan.
Gekonge, C. O. (Ed.). (2013). Emerging Business Opportunities in Africa: Market Entry,
Competitive Strategy, and the Promotion of Foreign Direct Investments: Market Entry,
Competitive Strategy, and the Promotion of Foreign Direct Investments. IGI Global.
hersheys.com (2018). [online] Available at: https://www.hersheys.com/en_us/products.html
[Accessed 21 Apr. 2018].
hersheys.com (2018). [online] Available at: https://www.hersheys.com/en_us/home.html
[Accessed 21 Apr. 2018].
Hutzel, T., & Lippert, D. (2014). Bringing jobs back to the USA: Rebuilding America’s
manufacturing through reshoring. Productivity Press.
Kizil, C., Eddy, V., Clary, L., & Crowell, K. (2013). Hershey's Entry to the Australian Market
with a New Brand: An Accounting and Marketing Perspective. Emerging Markets
Journal, 3(2), 97.
Leonidou, C., Katsikeas, C., & Morgan, N. (2013) "Greening" the marketing mix: do firms do it
and does it pay off?. Journal of the Academy of Marketing Science, 41(2), 151-170.
Patalinghug, J. C. (2015). The Effect of Advertising and In-Store Promotions on the Demand for
Chocolate. International Journal of Economics and Finance, 7(10), 56.

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