I- Company The Hershey Company, known until April 2005 as the Hershey Foods Corporation[2] and commonly called Hershey's, is the largest chocolate manufacturer in North America.[3] Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey's Chocolate World. It was founded byMilton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company. Hershey's products are sold in about sixty countries worldwide.[3][4] History After completing an apprenticeship to a confectioner in 1873, Milton S. Hershey founded a candy shop in Philadelphia, which failed six years later.[5]After trying unsuccessfully to manufacture candy in New York, Hershey returned to Pennsylvania, where he founded the Lancaster Caramel Company, whose use of fresh milk in caramels proved successful.[5] In 1900, after seeing chocolate making machines for the first time, Hershey sold his caramel company for $1,000,000[5] (equal to $27,596,000 today) and began to concentrate on chocolate manufacturing. He stated to people who questioned him, "Caramels are just a fad, but chocolate is a permanent thing." In 1903, Hershey began construction of a chocolate plant in his hometown, Derry Church, Pennsylvania, which later came to be known as Hershey, Pennsylvania.[5] The town was an inexpensive place for the workers and their families to live. Milton treated the people well and provided leisure activities to make sure the citizens enjoyed themselves. The milk chocolate bars manufactured at this plant proved successful, and the company grew rapidly. Milton built a milk-processing plant in the year 1896, so he could create and refine a recipe for milk chocolate candies. In 1899, three years later, he developed the Hershey process which is less sensitive to milk quality than traditional methods. In 1907, Hershey introduced a new candy, small flat-bottomed conical-shaped pieces of chocolate that he named "Hershey's Kiss". Initially they were individually wrapped by hand in squares of foil, and the introduction of machine wrapping in 1921 simplified the process while adding the small paper ribbon to the top of the package to indicate that it was a genuine Hershey product.[5] Now, 80 million of the candies are produced each day. Other products introduced included Mr. Goodbar, containing peanuts in chocolate, in 1925, Hershey's Syrup in 1926, semi-sweet dark chocolate chips in 1928, and the Krackel bar containing crisped rice in 1938. Harry Burnett Reese worked at Hershey, beginning in 1917, as a dairyman for the Hershey Farms. In 1921 he went to work in the factory. By 1925, he had developed an assortment of candies which he was able to sell to department stores in Lancaster, advertised as "made in Hershey." In 1926 he built his own factory and then in 1941 with the wartime rationing of sugar, Reese focused all of his production resources on his own confectionery masterpiece, the peanut butter cup, which required less sugar than most other confections of the time. In 1956, Reese died, leaving the company to his six sons. In June 1963, Hershey Chocolate Corporation acquired Reese's company for $23.3 million at a time when Reese's sales were $14 million annually.[6] Labor unrest came to Hershey in the late 1930s as a CIO-backed union attempted to organize the factory workers. A failed sit-down strike in 1937 ended in violence, as loyalist workers and local dairy farmers beat many of the strikers as they attempted to leave the plant. By 1940, an affiliate of theAmerican Federation of Labor had successfully organized Hershey's workers under the leadership of John Shearer, who became the first President of Local Chapter Number 464 of the Bakery, Confectionery, Tobacco Workers, and Grain Millers Union. Local 464 still represents the Hershey workforce. Shortly before World War II, Bruce Murrie, son of long-term president of Hershey's, William F.R. Murrie, struck a deal with Forrest Mars to create a hard sugar-coated chocolate that would be called M&M's (for Mars and Murrie). Murrie had 20 percent interest in the confection. The new confection would use Hershey chocolate during the rationing era during World War II. In 1948 Mars bought out Murrie's interest and would become one of Hershey's primary competitors.[7] In 2007, the Chocolate Manufacturers Association in the United States, whose members include Hershey, Nestlé, and Archer Daniels Midland, lobbiedthe Food and Drug Administration to change the legal definition of chocolate to let them substitute partially hydrogenated vegetable oils for cocoa butter in addition to using artificial sweeteners and milk substitutes.[8] Currently, the Food and Drug Administration does not allow a product to be called "chocolate" if the product contains any of these ingredients.[9][10] In December 2007, Philadelphia city councilman Juan Ramos called for Hershey's to stop marketing "Ice Breakers Pacs", a kind of mint, due to the resemblance of its packaging to a kind that was used for illegal street drugs.[11] In September 2008, MSNBC reported that several Hershey chocolate products were reformulated to replace cocoa butter with vegetable oil as anemulsifier. According to the company, this change was made to reduce the costs of producing the products instead of raising their prices or decreasing the sizes. Some consumers complained that the taste was different, but the company stated that in the company-sponsored blind taste tests, approximately half of consumers preferred the new versions. As the new versions no longer met the Food and Drug Administration's official definition of "milk chocolate", the changed items were relabeled from stating they were "milk chocolate" and "made with chocolate" to "chocolate candy" and "chocolaty."[12] Initial Struggle Milton was apprenticed at a every early age in a publication & then in a confectionery shop. • He established his first business venture in Philadelphia & soon he became bankrupt . • Milton joined his father in Denver, Colorado where his father had hopes of striking it rich in the silver mines but again this proved to be failure. • Milton launched a second venture into the candy business in New York City ,but again with little capital, and much competition his business collapsed. • External Challenges 1. Hershey’s most important retailers and competitors had entered a phase of significant consolidation that was changing influence within the category. The era of small, independent stores was over- the power now lay with retail chains. 2. Consumers were not embracing the increased flavor varieties from Hershey’s Brands. 3. Hershey’s emphasis on pack type was being trumped by competitors’ emphasis on brands. Vision & Mission Vision statement: Hershey Company’s vision is to be ‘the world’s first choice for chocolate everywhere, every time’. Mission Statement: The Hershey Company’s mission is to produce different chocolate flavors with best price for target markets. SWOT ANALYSIS Strengths: Hershey Foods has grown from a one-product, one plant operation to a $4 billion company . • Hershey entered 1996 as the largest candy maker in the United States with 30.7% market share. • Hershey is the largest pasta manufacturer in the United States with 28.4 % market share. • Hershey Foods Corporation has committed the highest standard of quality, honesty, fairness, integrity, and respect. • Weaknesses: s only 7 percent, lowest among its competitors. • Hershey’s global market share in the chocolate confectionary industry i Hershey has a major problem that a small price increase at the retail level severely restricts consumer buying. • Some analysts contend that Hershey International as a separate division producing and selling diverse products is an ineffective organizational design. • Opportunities: China and India are huge untapped markets. Malaysia, Indonesia, Vietnam, and Thailand also are untapped, So, Hershey has the opportunity to gain a foothold • in those Countries. Hershey has an opportunity to develop environmentally safe products and packages, reducing industrial waste, & recycling. • Hershey can diversify more into non-chocolate candies because that segment is growing more rapidly in foreign countries like U.S & U.K. • Threats: The main competitors of Hershey Foods are Mars and Nestle. Mars is already a threat for Hershey, because Mars has a stronger presence than Hershey in • Europe, Asia, Mexico, and Japan. Hershey, Mars has historically relied upon extensive marketing and advertising expenditures to gain market share, rather than on product innovation. • Nestle plans to continue to play to its strengths, international markets outside the United States, to combat Hershey. • Sales Objectives- Marketing Objectives 1. Company provide better customer service than competitors. 2. Company can come up with variety of Gum product and chocolate to increase the market share. 3. Increased marketplace competition has significantly impacted Hershey’s business and as a result, The Hershey Company has been required to increase expenditures for promotions and advertising and continue to introduce and establish new products. The foundation of the Hershey marketing strategy is their strong brand equities, product innovation, and superior quality of the products, manufacturing expertise, and mass distribution capabilities. Hershey stimulates sales of certain products with promotional programs at various times throughout the year. Marketing Strategy Marketing strategy Place: Hershey Corporation uses producer to wholesaler to consumer channel for distributing chocolates within a short distance whereas they use producer to wholesaler to retailer to consumer where the distance is long. Channels for Distribution: Supermarket School canteens Department Stores Commercial areas (7- Eleven, Mini Stop) Pharmacies Amusement Areas Convenience Stores Duty Free Outlets Groceries Product: From early on the company built its brand and its product lines on cultural ideals that resonate with Americans. There really was a Mr. Hershey – Milton – and his rags-to-riches story is an American Dream built on a mountain of candy.