Check out this company’s SWEET marketing strategies to meet the needs of chocolate and snack lovers worldwide! [Monday: Marketing Marvels]
It all started with an apprenticeship to a confectioner in 1873.
Back then, Milton S. Hershey, an American businessman, chocolatier, and philanthropist, opened a small candy shop in Philadelphia.
The shop was open for six years and there, Hershey apprenticed with a confectioner to learn how to make caramel. This enabled him to establish the Lancaster Caramel Company in 1886.
However, after seeing chocolate-making machines for the first time at the 1893 World’s Columbian Exposition in Chicago, Hershey sold his caramel company and decided to focus on chocolates.
“Caramels are just a fad, but chocolate is a permanent thing.”
This led to the creation of what is now one of the largest chocolate manufacturers in the world:
The Hershey Company is an American multinational company that mainly manufactures chocolates. It also sells other products such as cookies, cakes, and milkshakes.
Some of the company’s iconic products are:
- Reese’s Peanut Butter Cups
- Almond Joy
- Mr. Goodbar
… and many others.
127 Years of Bringing Sweet Moments of Happiness to the World
Hershey’s roots may be a tale as old as time but the company is constantly innovating its business operations and pushing the confectionery industry forward in marketing and digital commerce.
One of the ways Hershey’s does that?
Launching a new stand-up packaging for its brands in 2018!
According to Doug Straton, Chief Digital Commerce Officer for The Hershey Company, when Hershey’s was designing its new stand-up packaging, it was looking for a design that’s beautiful not only on store shelves but also on phone screens.
“The packaging needs to be seen on a 5-inch screen, but it also needs to be easily identifiable in the same way from about 20 feet. If you don’t merchandise the digital shelf correctly, people may not choose to shop with you in the digital or the physical store.”
The company also made sure that the new product packaging is sturdy enough to hold itself on a counter and is easy to open.
The stand-up bags feature a new branding design, including bright colors and recipes. These create a bold presence for Hershey’s products on store shelves, such as a vibrant orange section of Reese’s items and an eye-catching silver section of Hershey’s Kisses.
Another reason why Hershey’s shifted to stand-up packaging for its products?
The company believes this new design will help compel consumers to buy Hershey’s products in bulk! With appealing packaging, Straton says it would be easier for Hershey’s brands to get into consumers’ shopping lists.
Here’s another strategy that the company started using in 2018 to market its products:
Taking advantage of various online platforms to attract more customers!
According to Straton, Hershey’s is changing the way it does business.
“From process change at the R&D and innovation level all the way down through sales and marketing, we’re making the fine-tuned tweaks… to basically make everything that we do digital.”
The company’s digital strategy has 4 components:
- Search – Be easily found by consumers through various social media platforms, planograms, and search engines.
[Planograms: These are visual representations of products or services on display and are used as a tool for visual merchandising or optimizing the presentation of a brand’s offerings to better highlight their features and benefits.]
- Content – Be brilliant and eye-catching in both offline (package designs) and online (articles, posts, blogs, e-commerce, etc.) content.
- Conversion – Be effective in attracting and establishing good connections with new customers, clients, and business partners.
- Community – Be genuine in establishing 1:1 relationships with consumers by providing them with good quality products.
While these components are not new to Hershey’s, the company invests a portion of its resources into these aspects to connect its physical and digital retail ecosystems.
Thanks to this strategy, Hershey’s is able to convert more prospects into loyal customers, encourage repeat purchases, and get into consumers’ digital shopping lists.
In the past five years, The Hershey Company has recorded revenues of:
- USD 7.4 billion in 2016
- USD 7.5 billion in 2017
- USD 7.8 billion in 2018
- USD 8.0 billion in 2019
- USD 8.2 billion in 2020
These steady increases in the company’s revenues in the past five years show that Hershey’s is doing the right moves to market its products and connect with consumers across the globe.
The Hershey Company’s Earning Power: Valens Research vs. As-reported numbers
The Hershey Company (HSY:USA) makes for a great case study that we come back to regularly. One great reason?
The company has proven itself to be a better earning power generator than investors might think.
So, how well has HSY been growing its business in the past years?
The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.
The blue bars in the chart above represent HSY’s earning power (Uniform return on assets). Historically, HSY has seen generally robust and improving profitability. Its Uniform ROA ranged from 13% to 28% in the past sixteen years, or an average of 21%. Uniform ROA is at 28% in 2020.
The global ROA is just 6%.
The orange bars are the company’s as-reported financial information. If you relied on these numbers, you will see a company with understated profitability. As-reported ROA (return on assets, a measure of earning power) only ranged from 12% to 18% in the past sixteen years. Its as-reported ROA in 2020 was only at 13%, which is 2 times lower than its Uniform ROA in 2020.
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.
The numbers show that HSY has been doing well and making a profit.
For 127 years and counting, Hershey’s creates “moments of goodness” for people around the world through its iconic, beloved brands.
By innovating its products and systems to meet the needs of chocolate and snack lovers around the world.
With the right marketing strategies, such as the new stand-up packaging and the digital strategy, Hershey’s creates a unique place in the hearts and minds of consumers and differentiates itself from competitors.
… and although founder Milton Hershey is no longer around to supervise the company’s operations, his words remain at the core of Hershey’s business:
“Give them [customers] quality. That’s the best advertising in the world.”
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Head of Marketing
Valens Dynamic Marketing Capabilities
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