Nestle Vs Hershey

Nestle vs Hershey

Angela Anderson, Patti Rosenwald, Rexx Valentine

Cardinal Stritch University College of Business and Management

CMB 508 Advanced Marketing Management

Instructor: Pam Schlenvogt

October 25, 2012

Table of Contents

Introduction……………………………………………………………………………………..3

Nestle Company Overview..............................................................................................3

Hershey Company Overview...........................................................................................4

Environmental Factors…………………………………………………………………………6

Nestle Company Marketing Strategy for Coffee Mate.....................................................7

Hershey Company Marketing Strategy for Air Delights and Simple Pleasures...............9

Market Share…………………………………………………………………………………..11

Conclusion………………………………………………………………………………..……15

References……………………………………………………………………………………..16

Introduction

Nestle and Hershey are both names that are well-known and associated with quality chocolate products. This paper will explore what the companies are doing to market new products and maintain market share.

Nestle Company Overview

Nestle was created in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by two brothers George & Charles Page. The second company Farine Lactee Henri Nestle was also founded in 1867 by Henri Nestle. During the First World War the chocolate company grew significantly and again during the Second World War. Nestle extended their offerings beyond infant formula and condensed milk when the company first began. Nestle is a Swiss multinational and health related consumer goods company that is head-quartered in Switzerland. Nestle is the largest food company in the world measured by revenues.

Some of Nestle products include bottled water, breakfast cereals, baby food, chocolate, coffee, ice cream, dairy products, snacks, and pet foods. Nestle has 29 brands that has annual sales totaling over 1 billion and 450 factories that operate in 86 countries. Nestle employs approximately 328,000 people. One of their main shareholders is L' Oreal, the world's largest Cosmetics Company.

Nestle has made a number of corporate acquisitions including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988, and Gerber in 2007. Nestle was listed at number one in the Fortune Global 500, as the world most profitable corporation in 2011, with a market capitalization of $200 billion (Nestle SA., 2011).

Stage in the product life cycle Nestle

Nestlé's carnation flavored Coffee Mate was first marketed in 1961 to all coffee drinkers worldwide. Coffee mate was first made from dehydrated sugar and cream. Coffee mate is flavored or non-flavored, liquid or powered that goes hand and hand with coffee. Coffee mate creamers enhance the flavor in coffee, taste delicious, and have a long shelf life. Recently, Nestle has reinvented coffee mate in a large verity of flavors and has enhanced sales. This product is not affected much by the sluggish economy coffee drinkers love coffee mate. When using flavored coffee mate there is no additional sugar or sweetener needed. Coffee mate is the highest quality non-dairy product in the market. Coffee mate is marketed to all coffee drinkers worldwide (Nestle USA., 2011).

Hershey Company Overview

The Hershey's Company is a leading manufacturing chocolate company. The Hershey's chocolate company is one of the largest North America worldwide leaders in supplying sweet confection and chocolate products. Hershey's chocolate along with their company divisions retain the production, distribution, selling, and marketing of innumerable package types of chocolate and sweet confection products. Such as gum, and mint refreshment products along with food and beverage enhancers such as toppings and baking ingredients. Hershey's chocolate products are marketed under 80 brand names including Kit Kat, Hershey's Kisses, Reese's, Twizzlers and Ice Breakers.

Hershey's chocolate operates in the United States, Canada, Mexico, Brazil, Japan, Korea, China, India, and the Philippines. The company's strong research, development activities, and license agreements are the company strengths. Additionally, expansion into emerging markets and growing organic food could guarantee the company a strong future. Furthermore, a change in consumer preferences and increasing competition could affect the company growth (Hershey Food Corporation, 2007).

How has the economy affected product sales for Hershey chocolate syrup?

The classic taste of Hershey's chocolate syrup has been around since 1926. Hershey's chocolate in a smooth satisfying syrup that come in flavors such as regular, caramel, strawberry, special dark, calcium, lite, and sugar free. The naturally fat-free syrup is delicious in milk, on ice cream, and in recipes. The sugar free product line is designed for people with diabetes and those interested in cutting back on sugar have great tasting alternatives for enjoying Hershey's chocolate, jolly ranchers hard candy, breath savers mints, and ice breakers chewing gum all can be purchased sugar free (Hershey Food Corporation, 2007).

Stage in the product life cycle Hershey's

The product life cycle for Hershey's chocolate syrup at maturity stage has experienced a slow growth in sales due to its marketing mix. The market share has also decreased which affects annual profit for the company. However, Hershey's chocolate syrup has been around for years and is a well-known brand for people to enjoy of all ages. Hershey's mainly target children, teens, young adults, and older adults. Chocolate is targeted to everyone and there is no one I know that has a dislike for chocolate.

The yearly profit rate for the confectionery industry is about 30% of the whole food industry. This has accomplished a steady yearly growth rate of 13% within the last 10 years. Furthermore, Hershey chocolate syrup is a flat and stagnant product. The company has not done much to reinvent the product because the product is still a number one product on the shelves of many grocery store food chains around the world. The only small change that has been made to Hershey's chocolate syrup is that it comes in more flavors and they have a sugar-free brand (Hershey's Food Corp., 2007).

Environmental Factors for Nestle and Hershey Chocolate

Political: In recent years, the industrialized world has begun to center more heavily on healthier eating habits. This has directly come about due to the increased instances of diseases related to poor eating habits such as diabetes, heart disease, and cancer. This produces a vast threat to the cocoa and chocolate industry.

Legal and Regulatory: Recent laws have been passed by the Bureau of Food and Drug that forces food manufacturers to post health information and ingredients for consumer able items. These laws required food manufacturers to provide customers with unknown health information and therefore, discouraging sales of many unhealthy food products such as chocolate. Furthermore, as new ingredients are found to be a health risk, the Bureau of Food and Drug will force food manufacturers to post new information to the public.

Social: The consumers always change the preferences for products they purchase. They also want a greater variety of chocolate products. This allows the industry to develop their product line to meet the needs of the customers and in turn provide an opportunity for greater sales of existing and new products.

An increase in the significance of commercialized non-traditional holidays such as grandparents, best friends and sweetest day and traditional holidays such as Christmas, Valentine's, and Mother's day presents an industry opportunity to market specialized products tailored for the holiday's. The commercialization of these holidays inspires the customer to buy more chocolate products then they would in an average day. This offers an opportunity for specialized gifts and products increase in sales.

Technological: The cocoa and chocolate industries heavily rely on milk for their