International Market Entry Strategy for Hershey Foods Corp Essay

I. IntroductionThe Hershey Comp each is famously known for universe the biggest manufacturer of cocoas and confecti cardinalry products in USA, having hired over 15,000 employees worldwide and exporting their products to niprofity different countries over the world.The Hershey Company has several popular brands, roughly of close notable ones being Hersheys coffee tree Bar, Kit Kat, Hersheys Kisses, Reeses, York Peppermint Pattie, Rolo and Krackle Bar.With the help of these brands, Hershey gained success and popularity, making the conjunctions net worth over $4 billion dollars.Hersheys products include coffee berrys, confectioneries, fargon and bever era related products such(prenominal) as baking ingredients, toppings and so forthThe company lives by its mission statement, Undisputed market betoken Leadership (www.hersheys.com). Hershey continues to preserve a amplyer position by successfully converting consumer desires into reality.II. ObjectiveIt was Mr. Roger Clarke, V ice prexy Sales of Hershey Inter terra firmaal, a division of Hershey Foods Corporation, was reviewing the Australian figure. He had a card meeting to attend in a weeks cartridge holder and had to present his assessment of what the cause of failure had been in Australia. Was it strategical steal or had implementation been the problem, and what strategy would be appropriate for re-entry. in this grammatical case we de develop try to help how to grass the re-entry going smoothly by using the key SCM strategies, tools, best practisesIII. LiteratureThe Inter democracyal Marketing root appearance Evaluation Process is a five re-create process, and its purpose is to suppose which planetary market or markets offer the best opportunities for our products or go to succeed. The five steps be country Identification, Preliminary Screening, In-Depth Screening, Final selection and Direct Experience. Lets take a behavior at each step in turn1. spirit One Country IdentificationT he human is your oyster. You potful choose any country to go into. So you conduct country identification which means that you undertake a general overview of possible immature markets. There might be a simple match for example two countries might luck a homogeneous heritage e.g. the United Kingdom and Australia, a similar wrangle e.g. the United States and Australia, or even a similar culture, political political orientation or religion e.g. China and Cuba. Often selection at this coiffe is more straightforward. For example a country is nearby e.g. Canada and the United States. instead your export market is in the same trading zone e.g. the European Union. Again at this point it is very early daylights and potential export markets could be included or discarded for any frame of reasons. pic2. Step Two Preliminary ScreeningAt this second stage one takes a more serious look at those countries stay after undergoing preliminary screening. instanter you begin to score, we ight and rank nations establish upon macro-economic factors such as currency stability, exchange rates, level of internal outgo and so on. Now you suck up the basis to start calculating the reputation of market entry costs. Some countries such as China necessitate that some fraction of the company entering the market is owned domestically this would need to be taken into cover. There ar some nations that are experiencing political instability and any company entering such a market would need to be rewarded for the risk that they would take. At this point the merchandising motorbus could decide upon a shorter list of countries that he or she would privation to enter. Now in-depth screening croup begin.3. Step Three In-Depth ScreeningThe countries that agnise it to stage three would all be considered feasible for market entry. So it is vital that detailed instruction on the target market is obtained so that marketing decision-making can be accurate. Now one can carry of f with not only micro-economic factors but also local conditions such as marketing research in relation to the marketing mix i.e. what prices can be charged in the nation? How does one distribute a product or service such as ours in the nation? How should we communicate with are target segments in the nation? How does our product or service need to be adapted for the nation? All of this testament information go away for the basis of segmentation, targeting and positioning. One could also take into account the value of the nations market, any tariffs or quotas in operation, and similar opportunities or threats to untested entrants.4. Step Four Final SelectionNow a final shortlist of potential nations is decided upon. Managers would reflect upon strategic goals and look for a match in the nations at hand. The company could look at close competitors or similar domestic companies that have already entered the market to get firmer costs in relation to market entry. Managers could a lso look at other nations that it has entered to see if there are any similarities, or learning that can be use to assist with decision-making in this instance. A final scoring, ranking and weighting can be undertaken found upon more focused criteria. After this exercise the marketing manager should credibly try to visit the final handful of nations remaining on the short, shortlist.5. Step cinque Direct ExperiencePersonal experience is important. Marketing manager or their representatives should travel to a particular nation to experience firsthand the nations culture and business practices. On a first impressions basis at least one can as authoritative in what ways the nation is similar or dissimilar to your own domestic market or the others in which your company already trades. Now you get out need to be careful in respect of self-referencing. Remember that your experience to date is based upon your life mainly in your own nation and your expectations will be based upon what your already know. Try to be pliant and experimental in new nations, and dont be judgmental its about whats best for your company happy pursuitP.E.S.T. Analysis for HersheyPEST analysis stands for Political, Economic, Social, and Technological analysis and describes a model of macro-environmental factors used in the environmental scanning component of strategic focussing1. Political/Legal Analysis java producers unable to distribute products to certain countries. major(ip) issue is child labour in umber farms generally affected areas in Africa where child labour runs rampant. The Chocolate Manufacturers Association (CMA) and the World Cocoa Foundation (WCF) created the Harkin-Engel Protocol, which is an agreement that focuses on child labour practices on cocoa farms in West Africa. Result opened new transmit to export and distribute cocoa to international countries.2. Economic Analysis In every year, due to hurricane impact, flood, etc, the price of refined sugar decreased from $0.38 to $0.31 per belabor (estimate cost). This al slumped companies to cut sell costs and redistribute the savings. A lot of unwarranted material is produced, and companies spend thousands of dollars on disposing it. However, there is a new chance born due to recent developments in bio fuel or other energy alternative. New method of return that can use the byproduct of coffee bean manufacturing companies.3. Socio-cultural Analysis Consumers want a larger variety of drinking coffees and fitter alternatives to the traditional chocolates. blue-blooded chocolates provided several wellness benefits by adding a flavonoid in the chocolate that prevents non-homogeneous cardiovascular problems.4. Technological Analysis The chocolate and cocoa industries lack supports of Non-Government Organizations (NGO), which restrict the farmers access to business guidance, funding, and act education. Farmers cant learn new technologies making them less efficient. This prevents the choc olate manufacturers from gaining cocoa efficiently to create more chocolates for the consumer.Target Audience for Australia MarketThe primary consumers of Hershey Chocolates include a vast audience ranging from children, teenagers and adults. But more often than not, Hershey targets its consumers ranging from age 13-30 years old.The chocolate bar is considered a snack or is part of a daily diet in case of some athletes. The chocolates are addressable in most grocery encloses, gas stations, malls etc.Consumers to begin with buy chocolates according to their price. They also prefer if the chocolates fit their health and nutritionary requirements, although there is a very low margin of difference surrounded by selecting according to price and according to health.S.W.O.T Analysis for Hershey Food Corporation drum analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business take a chance. A SWOT analysis can be carried out for a product, place or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and untoward to achieving that objectivea. Strengths Hershey has grown from one product one plant to a $4 billion company with divers(a) quality chocolates. Its a strong brand name and has a strong image. Hershey was largest candy churchman in U.S. with 30.7% market parcel of land And want to expansion to Australia with market share 25% It is also the largest pasta manufacturer in U.S. with 28.4% market share Worlds largest chocolate plant in U.S., with more than 2 million sq. feet. Powerful partnerships (Starbucks, Kraft, Coca-Cola etc) Major profits go to Milton Hershey School for Orphans. to a fault donates to Red Cross, UNICEF, and Habitat for Humanity etc. Cooperative with students and professors. Toll bighearted number 1800-468-1714, to access additional information on request.b. Weaknesses Hersheys spherical market share is very low, around 10% and it happen in Australia Concern for natural environment needs to be expressed. Cocoa production rates are rising, and even a small price extend at retail level affects consumer buying. Poor decision making as company relies on brand loyalty and has reduced advertising expenditure. high price from the competitor make Harshey became premium pricing and the target make segmented. Insufficient advance by Hersheyc. Opportunities Potential to expand range of Dark/Sugar free products for health benefits. Use partnership ventures to create chocolate flavoured coffee products. Produce cocoa in new areas other than Africa, peradventure from South east Asia (Indonesia, Thailand, etc) Produce bio-fuel and another alternative Energy from the chocolate by-products Develop environment friendly packaging, recycling industrial waste China, India and absolute majority of South East Asia a re untapped markets and it can be delivered from Australian.d. Threats Consumer demanding healthier commutes. Steady rise in prices of cocoa, milk and sugar. Main competitors are impair and Nestle. 25% of Nestle revenues profits come from coffee. Nestle plays its strengths in international markets. Hershey is more focused on just local markets. Mars uses ample marketing and advertising expenditures to gain market share. Hershey just uses product innovationsFive forces to growth in Australia1. Threat for new entrantsThere is very low threat for new entrants in the chocolate industry because of the current economy, the various differences in products, and the constant need for large capital requirements. Also, since there is a lack of distribution channels and with the strict FDA regulations kept in place for food manufacturers, the threat for new entrants is almost non-existent2. Bargaining powers of buyersThe bargaining powers of buyers emergence by two factors a number of lar ge volume buyers and the buyers relatively low profits from the product.But since the industry as so many different products, the presence of different costs, the bargaining power of the buyers is low to contain at best.3. Bargaining power of suppliersThe bargaining power of suppliers has decreased since the chocolate industry is an important customer for the suppliers. But the power is moderate to high since the suppliers are concentrated there are no substitute products available.4. Pressures from substitute productsThe chocolate companies compete with various substitutes that threaten the industry. There are various flavours that are used as a substitute for chocolate. These include vanilla, butter, mint, rose, lemon, etc. Many consumers readily switch to these as they also consider chocolate to be unsound.5. Rivalries amongst competitorsAmong the chocolate industry, there are intense rivalries amongst the highest competitors. There are numerous strong chocolate manufacturers g iving out various varieties of chocolates at different prices, resorting to creative advertising schemes, constantly giving out new products and high quality chocolates to satisfy the consumer needs.Marketing mix systema. merchandise The new Hershey Slim dark chocolates will have a flavonoid affectionateness added which helps protect the cardiovascular system and is efficient until three hours upon consumption Produced for health conscious consumers to ensure that Hershey favours healthier alternatives. Hershey will also assure nation with health issues such as diabetics, that their chocolates are a safe and healthy alternative. The core strategy is to reinvent the image of chocolates from being a microbe of a lot of sugar and calories therefore making people fatness and/or diabetic, to an image where chocolates are considered an aid for protecting the consumers from heart affection and enhancing the rate of metabolism, by using flavonoids in their products.b. Price To keep th e chocolates passably affordable, keeping current financial trends in mind. To have a promotion campaign in part with the repugn Currently chocolate forbid are priced at $2.50 each. As part of the contest promotion, the chocolate will be sold at $2.00 each.c. People Target Audience would mainly be consumers from age range of 13-30 years, particularly health conscious individuals. The most bought products are chocolate bars, which some consider as a snack, age others as part of their daily diet.d. Place The chocolates will be available in grocery stores, malls, supermarkets, gas stations, coffee computer storages, airports, and at the main outlets.Major Channel Distributors Secondary Channels Supermarkets Commercial stores (7-11, Cheers) Department Stores Amusement areas (cinemas, parks) drugstore School Duty Free Outlets Mini market Grocery store Channel Distributor Gas Stations Main outlet e. progress The chocolates will be marketed through an interactive contest. Also, some promotional programs could be held under joint sponsorships through gyms/spas. customised chocolate products for the promotional, corporate, hospitality and special cause industriesObjectives and Strategiesa. Product To reinvent Hershey Chocolates as a health conscious low calorie dark chocolate. To reassure health conscious consumers to purchase this new product by providing all the necessary nutritional information Hersheys goal is to keep each products nutrition information up-to-date and accurateb. Objectives To promote the health benefits of the new Hershey Dark Chocolate Help the consumers change their mind-set that chocolates are unhealthy. To spread awareness and adjoin sales of the product.c. Strategy To increase sales using promotional materials such as an interactive contest. Make a new plant for chocolate nearby Australia, to increase the cost and make the price competitive.Example we can use one of the three proposed strategies.1. Hershey Dark Chocolate Mas cot Strategy individually chocolate has a code which in the package Unlocks part of a character. A total of 25 unique parts allowing consumers to create great hundred variations of characters. Customers can go online and create the character of choice online and submit to the contest Winning character will be the new mascot for the Hershey Slim. Winner will also receive gift vouchers and a 1 month social station to California Fitness Gym2. Healthy mind, healthy body with Hershey Strategy In the chocolate packaging are instructions to visit website Consumers have to play a classic memory game which has five levels of difficulty. card game show healthy foods, and Hershey products Winners who complete the final score under a specific time limit win a one day all access pass to California Fitness Gym3. wrap Cash Strategy Each Hershey Slim wrapper contains points These points can be collected under an online account Purchases can be made from the Hershey shop using these points. Ther e would be a limit to the number of points one can input per day, per account. The more you save, the bigger better things you can buy. Products would mostly include exercise equipment. Possible to buy products at half their retail price using the point system.ReferenceHershey Co. Form 10-K, The Hersheys Company, December 31st, 2009.Retrieved January 14th, 2011.http//www.thehersheycompany.com/assets/pdfs/hersheycompany/2009AnnualReport.pdfLovell, Jeremy. fertilise More Chocolates and Help the Environment PlanetArk.com November 7th, 2007. Retrieved January 14th, 2011.Michael et al. The Hershey Company Introduction the World of Chocolate, 2007. Retrieved January 10th, 2011.U.S. Labour Department Funds Project to Evaluate Effectiveness of Anti-Child-Labour Efforts in the Cocoa Industry. Worlds Technology News. October 4th,2006. Retrieved January 14th, 2011.Website http//www.marketingteacher.com www.hersheys.com www.thehersheycompany.com www.gogle.com