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Abstract
Hershey Company is among the leading manufacturers of chocolate confectionaries. In order to remain competitive, the company uses various marketing strategies to ensure that its products are of a high standard and that they are available in the market at all times. This is done by conducting studies on market needs and setting up proper communication channels within the company itself. The report discusses the marketing strategies that can enable the company to achieve greater sales and profits.
The Hershey Company manufacture and my product chocolate confectionary
Introduction
The Hershey Company, being a leading manufacturer of chocolate and non-chocolate confectionary in North America strives to maintain high-level brands. Among its products of chocolate confections are brands such as Almond Joy, Cadbury, 5th avenue, Heath, Hershey’s bliss, Hershey’s pot of gold, Kit Kat, Mr. Goodbar among others (Hershey’s, 2013). The company provides products that excel in their level of quality and their packaging standards. It mostly focuses on the North American market and to maintain its position among the leaders in its field, proper marketing of its products is undertaken. This involves using proper distribution channels equipped with appropriate information on the market needs to ensure that the products are available in the market when consumers need them.
Distribution channels
Two major types of distribution channels can be used in marketing and they are the direct and indirect distribution channels. In a direct distribution channel, a company sells its products directly to its clients without any intermediaries and this can be through online catalogs. Although this method helps cut distribution costs, there are limitations to it as it limits the geographical reach of a company’s products (Chron, 2013). Thus, for a large company like Hershey Company, an indirect distribution channel would be more suited. This channel may involve company representatives, distributors, and retailers who enable the company to access a larger geographical zone allowing the company to reach a larger market (Gerth, 2004). Indirect distribution channel is appropriate for Hershey Company in that it will allow the company to focus its energy on product creation and quality improvement while the intermediaries focus on market acquisition.
Type of marketing system to be implemented
A vertical marketing system integrated with a multi-channel marketing system will yield the greatest benefit for the company, as the different methods used will ensure expansion of the existing market. The vertical system will ensure that the company has control over the sales of its products throughout the marketing channel ensuring that maximum profits are gained from the sales made. The multi-channel system will be beneficial in that it uses research and analysis, which enables the company to gain more information on market needs enabling them to be more equipped to deliver on the requirements of the market.
Analyzing target markets needs in distribution channels
When organizing the distribution channel, customer requirements need to be considered. The behaviors of the target market of Hershey’s products should be analyzed. This analysis will aid the company to know which products should be sold in which regions and determine the regions in which more marketing measures should be taken to secure more consumers. It will also ensure that the distribution channels incorporated are in line with customer needs and that they lead to the achievement of the company’s objectives (Chron, 2013). By setting market distribution channels that are in line with consumer needs, the accuracy with which consumer requirements will be met will be high leading to increased consumer loyalty and precise cost allocation. This will increase the company returns both in the short-term and long-term while considerably lowering operational costs.
Channel members to be used
Since chocolate confectionaries by Hershey Company are products packaged in small quantities, the market base targeted has to be large. Thus, the indirect distribution channel will be used in marketing. The channel will involve manufacturer’s representatives, distributors and retailers (Gerth, 2004). Upon manufacture of the products, they will be sent to the company warehouses, where the company representatives will link up the company to distributors. The distributors located in different parts of the country will be responsible for getting the products to the retailers, from where they will be accessible to consumers.
Number of channel members to be used
At the distributor level, selective distribution should be considered to avoid the likelihood of counterfeit products being sold in the name of the brand (Chron, 2013). In this way, retailers will only purchase the company’s products from the distributors approved by Hershey. However, Hershey Company should engage in intensive distribution to retailers to make their products available in as many outlets as possible. This should be done at the retailer level in order to make their products easily accessed by consumers and to increase their visibility. Therefore, the company will make use of company representatives for marketing, selected distributors and as many retailers as possible.
Channel Organization
For the company to achieve increased growth in revenue and customer preference, it needs to conduct various researches on consumer requirements and behaviors. This means that it needs to work in conjunction with other departments in the company to ensure that its goals are achieved (Jordan courses, 2013). It needs to work hand in hand with the production department to ensure that consumer requirements are achieved in product creation. It also needs to work with the sales and distribution department especially if the vertical marketing system is implemented to enable control of the products in the distribution chain. Organization of how information gained on consumer needs and requirements is disseminated to the relevant departments is also important in achieving growth.
References
Chron. (2013). The Major Functions of a Distribution Channel. Retrieved from: http://smallbusiness.chron.com/major-functions-distribution-channel-59769.html
Gerth, D. (2004). Unit 13: Channels of Distribution, Logistics, and Wholesaling. Retrieved from: http://ww2.nscc.edu/gerth_d/MKT2220000/Lecture_Notes/unit13.htm
Hershey’s. (2013). About Hershey’s. Retrieved from: http://www.thehersheycompany.com/about-hershey.aspx
Jordan’s courses. (2013). Marketing Channels & Distribution. Retrieved from: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=9&ved=0CGEQFjAI&url=http%3A%2F%2Fjordanscourses.homestead.com%2F10_channels.ppt&ei=EqCbUfPSJaSc0wWww4DYDw&usg=AFQjCNGIr5oZeiTpFLr65ccetPg3B-Kx5g&sig2=SNAMOz4TWDJHfRP8FbHOSA&bvm=bv.46751780,d.d2k
Kerin, R., Hartley, S. & Rudelius, W. (2013). Marketing, 11th Edition. McGraw-Hill Higher Education.