One of the strategies currently applied by Hershey and evident from one of the recent press-releases is market penetration. Thus, the press-release Ice Breakers brand creates Team Unicorn to spark “Unicorn Moments” through Olympic Winter Games Pyeongchang 2018 dated December 06, 2017, presents the way the company implements the strategy. In fact, actions related to Unicorn Moments join two strategies simultaneously. On the one hand, it is product development, on the other hand, it is market penetration. Thus, Hershey prepares for the 2018 Winter Olympics and introduces a new product, Unicorn Moments, under the brand of Ice Breakers (Hershey, 2017, December 06). The strategy of market penetration is used by the company to introduce its product to a new market during the Olympic Games.
The advantage of this strategy is as follows. According to David and David (2017), this strategy helps to enhance market share for the products or services due to making more marketing efforts. For Hershey, this strategy can be effective because the market that is created during such big international events as the Olympic Games is a good place to increase market share and attract new customers because after the event is over, a certain part of new customers can stay with the company.
David and David (2017) single out the increasing need for new salespersons and growth of expenses on advertising as the disadvantages of this strategy. A possible disadvantage for the Hershey Company in applying a market penetration strategy is the necessity to involve many temporary employees to organize product sales during the Olympics, which can be expensive. An increase in expenses on advertising is not likely to be a disadvantage for the company because excessive advertising is typical of Hershey.
Another strategy implemented by the Hershey Company is product development. This strategy is actively used by the company due to the peculiarities of a confectionery industry that demands new products to keep customers interested. Thus, Hershey introduced the launch of new chocolate bars, Hershey’s Gold (Hershey, 2017, December 05). The company developed a fourth flavor of the already existing and famous brand.
Product development as a strategy has a significant advantage; it “seeks increased sales by improving or modifying present products or services” (David & David, 2017, p. 139). Based on the way Hershey implement the strategy, it is appropriate for this case. The fact that the company developed a new flavor of the existing successful product suits the guidelines for the application of the strategy.
Still, this popular strategy has a disadvantage. According to David and David (2017), product development “entails large research and development expenditures” that make its successful implementation expensive (p. 139). However, this fact is not a disadvantage for the Hershey Corporation because it is a big company and one of the leaders in the confectionery industry that can afford such expenses. A possible disadvantage for Hershey can be a reduction of sales of other existing products due to the release of a new flavor. Still, the company sells a variety of products, and new ones are launched regularly, which is characteristic of the industry. Moreover, Hershey has many loyal customers. Thus, the new flavor is not likely to have any negative effects on sales in general.
References
David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach, concepts and cases (16th ed.). Boston, MA: Pearson. ISBN: 9780134167848.
Hershey. (2017). Chocolate on chocolate on chocolate: Hershey’s cookie layer crunch launches new triple chocolate flavor. Web.
Hershey. (2017). Ice Breakers brand creates Team Unicorn to spark “Unicorn Moments” through Olympic Winter Games Pyeongchang 2018. Web.
