The Hershey’s Company, 2011) reese’s peanut butter cups, first introduced in 1928, are chocolate and peanut butter candy manufactured by the Hershey’s (Chocolate) Company in Pennsylvania



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(The Hershey’s Company, 2011) REESE’S Peanut butter cups, first introduced in 1928, are chocolate and peanut butter candy manufactured by the Hershey’s (Chocolate) Company in Pennsylvania. REESE’S is an iconic brand with more than 21 variations including but not limited to baking pieces, ice cream toppings and peanut butter (2011). Ice cream companies and cereal companies also license REESE’S as a signature flavor. Although REESE’S products are sold in more than 2 million retail outlets in the United States, they are also marketed in more than 90 countries (2011). Not surprisingly, its parent company, Hershey’s (HSY) has captured the top slot in the candy/confectionary sector (Bavdek, 2008; CandyUSA, 2010).

Despite the economic downturn and other external forces including but not limited to the rise of the “health culture,” obesity and diabetes prevention programs, rising ingredient costs, and increased customer demands for social responsibility, Hershey’s profits increased 3 % in 2010 (Story & French, 2004; CandyUSA, 2010) . Although many companies face stiffer competition in the intensifying global market place, REESE’S has harnessed many of its past marketing strategies, and targeted market segments like those it previously and currently targets in America (Story & French, 2004). Moreover, Hershey’s and REESE’S global supply, distribution and regional manufacturing chain have facilitated its expansion into 90 countries (The Hershey’s Company, 2011). Through these efforts, Hershey’s has increased REESE’S brand recognition, cultivated demand and customer loyalty.


Like any signature brand and product, REESE’S is subject to market forces including competition from MARS chocolate company products, particularly the SNICKERS bar (MARS, 2011), a candy bar with peanuts, caramel and nougat then coated with milk and the chocolate and the peanut butter candy manufactured by Mars under the DOVE signature brand (Miller, 2010). Nestlé’s Crunch bars and Butterfinger bars also challenge REESE’S market share. In fact, the Mars products and Nestlé’s products also appear in various forms including ice cream toppings and flavorings (Mars, 2011; Nestlé’s, 2011). Baking companies also license these products as a signature flavor to cultivate demand. Therefore, REESE’S, Mars and Nestlé’s not only share the same candy/confectionary sector but also license their flavorings and ingredients to many of the same grocer products (Story & French, 2004; Miller, 2010). Because of this, brand name recognition, cultivating customer demand and maintaining customer loyalty are paramount. For information that is more detailed see the product & brand comparison chart.


REESE’S_Strengths'>REESE’S Strengths


  • Markets to more countries

  • Capitalizes on promotion like the current “Green Lantern” movie (REESE’S, 2011)

  • Offers the most variations, signature peanut butter & baking chips

  • REESE’S offers a kid-friendly website.

  • REESE’S Moderation Nation addresses health concerns relative to sugar consumption, obesity and diabetes prevention initiatives.


REESE’s Threats

  • Increasing peanut, milk allergies among people.

  • Majority of the world is lactose intolerant.

  • Obesity Prevention and Diabetes Prevention programs- lesser market place presence (Story & French, 2004).

  • Mars & Nestlé’s also in global market

  • Competitors’ Social, Environmental and Corporate responsibility programs (Mars, 2011; Nestlé’s, 2011).

  • Nestlé’s Swiss chocolate partnership offer better global visibility and name recognition.

  • SNICKERS bar most popular- More than $2 billion annual Global sales (Mars, 2011SNICKERS).

  • Snicker’s signature cheesecake. (Mars, 2011).

  • Nestlé’s signature ice cream brands. (Mars, 2011).

  • New products.

  • Direct competition with nation favorites in foreign markets.


REESE’S Weakness


  • The variations of REESE’s products available weaken its market presence, brand
    recognition and value.

  • Hard to quantify sales vs. SNICKERS with lesser variations.

Brand and Product Comparison




REESE’S

Mars SNICKERS & DOVE Chocolate & Peanut butter Bars

Nestlé’s BUTTERFINGER & CRUNCH bars

Variations

21

SNICKERS- 5

DOVE- 1


BUTTERFINGER-3

CRUNCH-3


Cereal flavoring

X

-

-

Ice Cream topping

REESE’S 6 kinds

SNICKERS

Both

Ice cream products

X

SNICKERS

3 CRUNCH (Specialty Brand)

Baking Products

3 Types REESE’S Chips and Mixes

Mixes (SNICKERS)

MIXES (BOTH)


Yogurt

REESE’S

SNICKERS

BOTH

Promotions/ Advertising

Movie, TV, Web

WEB, TV, Sponsor NASCAR & other events

Web, TV

# of countries

90

60

60

Ingredient Source


Outsource

In-house contracts

In-house contracts



Market Force

REESE’S Strategy

Competitor Brands

REESE’S Placement in more grocery products
Capitalizes on its variations

Obesity & Diabetes prevention programs

Offers snack size 100 calories variations

Hosts Moderation Nation on its website with nutritional information and wellness guidelines


New products & competition with national favorites in foreign markets

“Green Lantern” Promotion- REESE’S dovetails off the movie promotions & cultivates customer demand.



Observations

REESE’S strength lies in its name and brand recognition and in its variations. However, its variations also weaken the associative value of the REESE’S brand. In fact, it cultivates highly individualized and subjective value associations with these variations. While this is not problematic in itself, REESE’s could engage an advertising campaign that draws upon “personal/ME” branding. This might increase brand recognition and consumer awareness relative to these variations. This would cultivate demand and offer consumers more options to accommodate personal tastes.


Its current marketing campaign/promotion with the (REESE’S, 2011) “Green Lantern” movie currently in theatres mirrors its previous “E.T.” movie-based REESE’S Pieces promotion. (Miller, 2009) Although SNICKERS has promoted its brand through sponsorship of events and organizations including NASCA, its sales have declined over the past decade. Therefore, REESE’S can capture some of these lost sales.
REESE’S Recommendations


  • In recent years, the chocolate/confectionary industry has become increasingly competitive, especially within an intensifying global market place. Since all of the aforementioned products also contain milk and more than 75% of the world is either allergic to milk or lactose intolerant, REESE’S like its competitors may have to alter its ingredients (Story & French, 2004). With the rising prevalence of milk and peanut allergies in the developed countries, as well, REESE’S and its competitors face significant barriers to consumption and demand. Since the main ingredient is cacao, reformulating many of its products should not be problematic.


  • REESE’S should develop more products to match the tastes and expectations in foreign markets. Notably, this might include more partnerships with yogurt manufacturers including soy and rice product manufacturers.

  • Additionally, perhaps, REESE’S could gain significant sales through a REESE’S for ME campaign, using global voices, harnessing the power of diversity and REESE’S ability to match or meet these demand through its variations and their recipe possibilities.

References
Bavdek, M. (2008 Oct. 16). UPDATE 3-Hershy U.S. market share stabilizes, shares rise. Reuters.

Retrieved from http://www.reuters.com/article/2008/10/16/hershey-


idINN1647981520081016?sp=true
CandyUsa. (2010). Hershey Sales, Earnings Increase. Retrieved from http://candy.amplify.com/

2010/02/03/hershey-sales-earnings-increase/


MARS. (2011). Home Page. Retrieved from http://www.mars.com/global/index.aspx
Miller, M. (2010 Nov. 26). Hershey Co. sues competitor Mars, claiming trademark

infringement in candy packaging. The Patriot News. Retrieved from


http://www.pennlive.com/midstate/index.ssf/2010/11/hershey_co_sues_competitor_mar.html

Miller, M. (2009 ). Snickers nutty? Retrieved from http://www.brandchannel.com/

features_webwatch.asp?ww_id=440

Nestle’s. (2011). BUTTERFINGER. Retrieved from http://www.nestle.com/Brands/Pages/

BrandsDetail.aspx?brandguid=184742C4-A05D-408E-B047-8104F7BBD39C&BrandName=Butterfinger

(2011). Nestle crunch. Retrieved from http://www.nestlecrunch.com/
Story, M. & French, S. (2004). Food advertising and marketing directed at children and

adolescents in the US. International Journal of Behavioral Nutrition and Physical


Activity 2004. Retrieved from http://www.ijbnpa.org/content/1/1/3
The Hershey Company. (2011). Home Page. Retrieved from http://www.thehershey
company.com/
(2011). REESE’S peanut butter cups. Retrieved from http://www.hersheys.com/

reeses.aspx


The Hershey Company. (2011). Moderation Nation. Retrieved from
http://www.thehersheycompany.com/nutrition-and-wellness.aspx
Reese’s Snacketer snack mix. Retrieved from http://www.thehersheycompany.

com/brands/snacksters/reeses-snack-mix.aspx?cat=sn#/2006




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