HERSHE YS

New Product Proposal

Rebecca Buddingh, Robyn Wolfish, Stephanie Carpenter, Stanley Ho, Winnie Xu

POSITIONING STATEMENT
Hersheys is the only chocolate candy brand in the United States that offers low price, convenient, multipurpose products uniquely associated with feelings of nostalgia and the classic American dream.

BRAND MANTRA
Emotional Modifier Hersheys Cheerful Descriptive Modifier American Classic Brand Function Chocolate Product

MENTAL MAPS
Positive Associations Negative Associations

PERCEPTUAL MAP
Convenience versus Quality
Note: The ratings for Hersheys and the competing brands are based strictly on quantitative survey findings
Quality

Cheerfulness

CONSUMER PROFILE
The typical Hersheys consumer is:

- Young and/or - Youthful - Loves chocolate - American - Family-oriented - Happy - Fun - Middle Class - Conservative - Frugal

POINTS OF PARITY
----Used for snacking or baking -- Variety of types Sweet and indulgent -- Enjoyed by people of all ages Consistent quality Associated with holidays (ie: Halloween, Valentines Day)

POINTS OF DIFFERENCE
----American image -- Associated with Smores Nostalgic, heritage brand -- Identifiable by Hershey Kisses Low price enables daily consumption -- Hershey, PA Sold in different types of retailers -- Entertainment & resorts

CBBE MODEL
Strengths:
Brand Salience:
Hersheys is extremely well-known in the chocolate category and the favorite chocolate brand for about 1/5 of consumers. Additionally, Hersheys has a 75% likelihood of repeat purchase among respondents.

Weaknesses:
Though consumers trust Hersheys as a company, they question the quality of the products. Hersheys is not usually preferred when premium chocolate brands are available, but considered a quick fix for a chocolate craving, as one respondent said.

Consumer Judgments:

Brand Performance:

Consumers indicate that they purchase Hersheys chocolate because of its low price, convenience, easiness of purchase (available in grocery stores, convenience stores, superstores, etc.) and large variety of products.

Brand Imagery:

Hersheys fails to evoke strong feelings among consumers. Levels of happiness and satisfaction are raised slightly after consuming Hersheys products, but does not compare to competitors in other feeling categories. Though Hersheys consumers exhibit some behavior loyalty, they do not actively engage with the brand or recommend it to others.

Consumer Feelings:

Hersheys has a wide variety of usage situations (Smores, cooking, snacking), associations with holidays and an exceptionally high sense of nostalgia and history.

Consumer Brand Resonance:

CONCEPT # 1
Bisquick Pancake Mix with Hersheys Chocolate Chips
Love chocolate chip pancakes? Now you can make your breakfast experience that much easier with your favorite pancake mix and Hersheys chocolate chips in one convenient box.

CONCEPT STATEMENT
Description:
A new Bisquick product with Hersheys chocolate chips for chocolate lovers everywhere.
- Traditional Bisquick box and product -Will include 6 oz bag of Hersheys semisweet chocolate chips for consumer to add if they choose -Bisquick box will include Hersheys logo - Will be sold next to traditional Bisquick in the baking aisle at grocery stores

Suggested Price:
$ 5.00

BRANDING STRATEGY
Branding Strategy: Modified Ingredient Branding Extension Strategies: Product that contains the brands distinctive Extension Classification: Category Extension
ingredient; Product that capitalizes on the firms perceived expertise

PRODUCT OPPORTUNITY GAP

- Shoppers want to spend minimal time at grocery store - Increase of in-home breakfast preparation - Increase in single, working parents results in little time to make breakfast

SOCIAL

Quick and pancakes that simplify the grocery shopping experience and capitalize on an existing usage trend

- Shoppers looking for bundled deals in current economy - Discretionary income available for middle and upper-middle class to afford the luxury of convenience easy-to-make products

ECONOMIC

- Increase in manufacturing partnerships between corporations with different expertise, especially within the baking category

TECHNOLOGY

CONSUMER INSIGHT
Reality
Consumers in focus groups were surprised Hersheys hadnt already created this relationship. One respondent said, I wouldnt be surprised if Hersheys actually did this. I dont know why they havent already. Thus, the product seems realistic for the target market. This extension capitalizes on an existing trend using chocolate chips in pancakes to add flavor and unique taste. Because Hersheys would be the first chocolate brand to partner with a pancake mix, it would provide consumers with an incentive to use Hersheys chocolate chips over other brands. Therefore, even if consumers didnt purchase the Bisquick/Hersheys mix, they would begin to associate the two brands with each other, recognizing the shared equity. Survey respondents and focus group participants liked this product (4.13 ratings on a scale of 5) because of its convenience and use to make large quantities.

Points of Parity
- Baking item - Easy-to-make pancakes - Breakfast - Quick, Instant

Relevant

Points of Difference
- Pre-packaged chocolate chip pancakes - First partnership of its kind

Resonate

Reaction

3 FACTOR MODEL
Salience Favorability
Focus group respondents were aware of the transfer of the following associations to the new product: Semi-sweet chocolate, family-oriented, traditional, cooking/baking usage, convenience, easy-to-use Survey respondents ranked product a 4.35 (on a scale of 1 to 5) as a product they would trust from the Hersheys brand. In addition, the product capitalizes on the perceived expertise, quality, reliability and nostalgia of Hersheys. First chocolate chip/pancake mix combination on the market; New usage situation for Hersheys chocolate - breakfast

Uniqueness

4 FACTOR MODEL
Compelling
Relevant Consistent
Entrance in breakfast category allows new usage situations; Reinforces the use of Hersheys chocolate as an ingredient; Survey respondents gave the product a 4.29 tasty rating (on a scale of 1 to 5) because of their previous experiences or associations with Hersheys chocolate; Reinforces nostalgic quality of Hersheys chocolate as focus group participants recounted on childhood memories when they saw the product Hersheys chocolate has greater purchase consideration as 72% of survey respondents would definitely or probably buy the product; Strengthens consumer judgment of Hersheys market leadership due to omnipresence in grocery stores Survey respondents ranked product a 4 (on a scale of 1 to 5) for how well it fit with the Hersheys brand; Can be purchased in grocery stores like other Hersheys products; Creates additional usage occasions for Hershey's chocolate; Reinforces core brand association of classic and family products

Strong

Moderate: Gives consumers a reason to use Hersheys chocolate chips when making pancakes, but may not have a strong enough impact to change Hersheys brand perceptions because the product is in a new category.

VALUE OPPORTUNITY CHART

Low
EMOTION Adventure Independence

Medium

High
IMPACT Social Environmental

Low

Medium

High

Security
Sensuality Confidence Power ERGONOMICS Comfort Safety

CORE TECHNOLOGY

Reliable
Enabling

QUALITY

Craftsmanship Durability

OVERALL

Profit Brand

Ease of Use
AESTHETICS Visual Auditory Tactile Olfactory Taste

Extension

Focus group participants said:

It is instant and quick. Easy to make in bulk. I love chocolate chip pancakes. Never been done, smart!

IDENTITY

Point in time
Sense of place Personality

PROS AND CONS

Pros
- 61% of respondents said a partnership between Hersheys and Bisquick is a great idea - All respondents preferred Bisquick to other instant pancake mix brands - Respondents felt the product was instant, quick and made it easy to produce large quantities

Cons
- Respondents said product was slightly unoriginal; feel similar products already exist - Consumers can purchase their own chocolate chips, and may not be motivated to purchase the product unless the price was low or a better value than purchasing the two ingredients separately - Respondents were disillusioned by high caloric value

RECOMMENDATIONS
- Market product as something that is unique because it simplifies the shopping process for chocolate chip pancakes - Remain silent about health risk, high caloric value. The product is not intended to be healthy and should be advertised as a special, nostalgic treat much like Hersheys chocolate products

CONCEPT # 2
Hersheys Cocoa-To-Go
A portable alternative to the bulky hot chocolate packages offered by competitors such as Swiss Miss and Nestl. No need to hassle with the big container of chocolate powder or syrup. And with dual uses, Hersheys CocoaTo-Go pleases fans of hot chocolate and chocolate milk.

CONCEPT STATEMENT
Description:
High quality chocolate powder for quick and easy hot cocoa or chocolate milk. Just add water or milk and youre good-to-go!
- 1.5 oz of Hersheys unsweetened chocolate cocoa and sugar mix, in a slender tube - Each box of Cocoa-To-Go will contain 10 servings -Portability will allow consumers to bring the product with them to school, work, restaurants

Suggested Price:
$ 3.00

- Will be sold in grocery stores in the coffee/tea aisle and in an end display near the milk

BRANDING STRATEGY
Branding Strategy: Modification of Existing Brand

Extension Strategies: Same product in a different form; Product that contains

Extension Classification: Line Extension

the brands distinctive ingredient; Product that capitalizes on the firms perceived expertise

PRODUCT OPPORTUNITY GAP

- Trend of on-the-go products - Decrease in amount of leisure time to enjoy hot or cold drinks at home - Capitalizes on success of other packaged powder drinks (ie: Crystal Light, Nescaf, Tasters Choice Instant Coffee) - Trend of 2-in-1 products

SOCIAL

Multi-use chocolate powder in a portable, slender package that can be used to make hot cocoa or chocolate milk

- Increase in discretionary income to purchase higher-end drink mixes (ie: Starbucks VIA) - Low material costs, as the products main ingredient is already offered by the parent brand

ECONOMIC

- Increase in manufacturing abilities to produce slender, sleek food packaging

TECHNOLOGY

CONSUMER INSIGHT
Reality
The majority of focus group respondents said they could see this being something Hersheys would market. According to one participant, People already use Hersheys baking powder to make hot chocolate, why not make it more convenient? Most participants understood why Hersheys would want to pursue a 2-in-1 product, but that did not necessarily make them want to purchase the product. Respondents said they enjoy hot cocoa, but do not see a need for the slender packaging. I dont think the exiting Swiss Miss packaging is bulky or tastes any worse than Hersheys, one person said. Because there are already many brands using similar packaging, the upgrade for Hersheys would not resonate with consumers, as they would merely consider this endeavor as a copy of what other brands are doing. Thus, it would not help the Hersheys brand as a whole. Consumers generally responded that they liked the portability of the product, but were not motivated enough to purchase the product. Only 20% of consumers said they would definitely purchase Cocoa-To-Go.

Points of Parity
- Cocoa Mix - Hot Drinks - Chocolate Milk Mix - Can be combined with milk or water

Relevant

Points of Difference
- Can be used on-the-go - Stick-shaped package - Pre-portioned

Resonate

Reaction

3 FACTOR MODEL
Salience Favorability Uniqueness
Focus group respondents were aware of the transfer of the following associations to the new product: Childhood, easy-to-use, convenient and traditional. Respondents were aware that Hersheys products can currently be used to make hot chocolate or chocolate milk. Survey respondents ranked product a 4.16 (on a scale of 1 to 5) as a product they would trust from the Hersheys brand. In addition, Cocoa-To-Go capitalizes on the perceived expertise, multiple uses and good taste of Hersheys products. Innovative, sleek packaging; Intended for single use with pre-portioned; Appeals to moms, college students, children and others.; Can be used for hot chocolate and chocolate milk

4 FACTOR MODEL
Compelling Relevant
Portability allows for new usage situations; Allows Hersheys to be innovative with the packaging of its products; Reinforces cross-generational appeal of Hersheys; Supports Hersheys brand association as tasty, as survey respondents rated product a 4.16 (on a scale of 1 to 5) as something that seemed like it would taste good. Survey respondents said the product would not change their feelings toward the Hersheys brand, giving it a neutral rating of 3.04 (on a scale of 1 to 5). The product has low purchase consideration as only 20% of survey respondents would definitely purchase it. However, the product strengthens the reliability of Hersheys, as it was given an average rating of 4.20 (on a s cale of 1 to 5) by survey respondents. Survey respondents ranked product a 3.88 (on a scale of 1 to 5) for how well it fit with the Hersheys brand. The use of cocoa powder to make hot chocolate and chocolate milk is already a function of Hersheys, but the product capitalizes on the option to make either drink from one tube. Moderate: The product would strengthen the consideration of Hersheys for hot chocolate and chocolate milk, but would not necessarily change the way consumers feel about the Hersheys brand.

Consistent
Strong

VALUE OPPORTUNITY CHART

Low
EMOTION Adventure Independence

Medium

High
IMPACT Social Environmental

Low

Medium

High

Security
Sensuality Confidence Power ERGONOMICS Comfort Safety

CORE TECHNOLOGY

Reliable
Enabling

QUALITY

Craftsmanship Durability

OVERALL

Profit Brand

Ease of Use
AESTHETICS Visual Auditory Tactile Olfactory Taste

Extension

Focus group participants said:

Portable, fast, and easy Inventive I love hot cocoa and things that are portable

IDENTITY

Point in time
Sense of place Personality

PROS AND CONS

Pros
- Respondents said the product is
convenient, has likeable ingredients and would be effortless to carry - This product ranked higher than the other new Hersheys products for being the easiest to use - It has different packaging and a unique look in comparison to other hot chocolate and chocolate milk products

Cons
- Many competitors - Some respondents felt that existing hot chocolate packets are easy enough to transport so there is no need for new packaging - Concern that the price would be too high - Finding hot water or milk on-the-go is not always a simple task - The product may be too similar to regular hot chocolate; there is not a big enough differentiation

RECOMMENDATIONS
- Develop another point of difference between Hersheys Cocoa-To-Go and competitors - Drop the dual use (hot chocolate, chocolate milk) and focus solely on a hot cocoa product or a chocolate milk product - Stress the low price point that is similar to competitors when marketing the product

CONCEPT # 3
Betty Crocker Supreme Bars Smores
Recreate the Smores taste you love without the campfire. Betty Crocker Supreme BarsSmores, combine Hersheys chocolate with miniature marshmallows and graham cracker crumbs for an easy-to-make dessert, perfect for any time of the year!

CONCEPT STATEMENT
Description:
Betty Crockers newest addition to the Supreme Bars line. An easy-to-make dessert creation with Hersheys rich milk chocolate, graham crackers and marshmallows.

- Packaged in Betty Crocker Supreme Bars box - Box comes with: - 1 package of graham cracker dough mix - 5 Hershey's Milk Chocolate bars - 1 package of miniature marshmallows - 1 packet of squeezable chocolate for decorative finish - Additional ingredients needed: - Water, 1 egg, vegetable oil - Sold in baking aisle next to cookie, cake and bar mixes

Suggested Price:
$ 3.00

BRANDING STRATEGY
Branding Strategy: Ingredient Sub-Brand Extension Strategies: Product that contains the brands distinctive Extension Classification: Line Extension
ingredient; Product that capitalizes on the firms perceived expertise

PRODUCT OPPORTUNITY GAP

- Trend of baking desserts from boxed mixes (ie: Betty Crocker, Duncan Hines, etc.) due to less free time to make baked goods from scratch An easy-to-make dessert - Increased desire for more that leverages a common occasions to eat Smores

SOCIAL

- Value-priced grocery products appeal to the masses - Low material costs by using ingredients already produced by Betty Crocker and Hersheys

ECONOMIC

Hersheys association with the strength of one of Americas favorite baking brands, Betty Crocker

- High-quality manufacturing abilities of Betty Crocker

TECHNOLOGY

CONSUMER INSIGHT
Reality
None of the eight focus group participants said they would be surprised if Hersheys and Betty Crocker actually created this product. Hersheys is often associated with Smores and Betty Crocker is always coming out with new mixes, one respondent said.

Points of Parity
- Baking product - Smores flavor - Dessert - Entertaining usage

Relevant

Respondents indicated that they enjoy eating Smores and would like more opportunities to do so. Those who cooked said they would definitely want to bake a dessert that resembled Smores.
This product evoked feelings of nostalgia among focus group participants. Many said they already thought of Hersheys when they heard the word Smore, therefore this product would help strengthen one of Hersheys key usage associations. Consumers love the idea of creating this dessert in the comfort of their own kitchen, versus the usual campfire setting which isnt a feasible year-round location. This product had the highest likeability rating on the survey.

Points of Difference
- Easy to make - Creates nostalgia through sense of place

Resonate

Reaction

3 FACTOR MODEL
Salience Favorability Uniqueness
Focus group respondents were aware of the transfer of the following associations to the new product: Smores, family activity, tradition, tasty, affordable, classic, heritage. A majority of participants said they only use Hersheys chocolate when making Smores. Survey respondents ranked product a 4.36 (on a scale of 1 to 5) as a product they would trust from the Hersheys brand. In addition, the product capitalizes on the perceived expertise of both Hersheys and Betty Crocker, the popularity of Hersheys chocolate for making Smores and its ability to be used by chocolate lovers in any market segment. Use of Smores for entertaining purposes; Transfer location of Smores-making from the campfire to the kitchen

4 FACTOR MODEL
Compelling Relevant Consistent Strong
As a baking product, Betty Crocker Supreme Bars Smores allows for new usage occasions and locations of Hersheys products. The product strengthens the existing relationship between Hersheys and Betty Crocker and reinforces nostalgic associations of bo th brands. Supports Hersheys brand associations of tastiness, as survey respondents rated the product a 4.4 (on a scale of 1 to 5) as something that seemed like it would taste good.

80% of survey respondents already purchase ingredient branded Betty Crocker/Hersheys products, meaning there is a high chance that they would venture to purchase this product as well. Additionally, survey respondents rated the product a 4.16 (on a scale of 1 to 5) as something that would make them happy.
Survey respondents ranked product a 4.24 (on a scale of 1 to 5) for how well it fit with the Hersheys brand. Betty Crocker Suprem e Bars Smores capitalizes on a strong and unique association of Hersheys, and makes Smores a more useful and common cooking practice in an additional location. Strong: The product extends from two of Hersheys points of strength Smores association and taste and has the potential to strengthen the relationship between Betty Crocker and Hersheys, which is already received well among consumers

VALUE OPPORTUNITY CHART

Low
EMOTION Adventure Independence

Medium

High
IMPACT Social Environmental

Low

Medium

High

Security
Sensuality Confidence Power ERGONOMICS Comfort Safety

CORE TECHNOLOGY

Reliable
Enabling

QUALITY

Craftsmanship Durability

OVERALL

Profit Brand

Ease of Use
AESTHETICS Visual Auditory Tactile Olfactory Taste

Extension

Focus group participants said:

I like bars, theyre easy to make. I love these. Its easy and it makes me nostalgic.

IDENTITY

Point in time
Sense of place Personality

PROS AND CONS

Pros
- The product creates nostalgia because it is
something respondents associated with memories of their childhood - Makes it easy to recreate the traditional Smores treat through the new usage location - This product was rated higher than the other new Hersheys products in tastiness - Focus group participants received this product more favorably than the other two

Cons
- This product appeared difficult to make to some respondents - Some focus group participants would rather make regular, authentic Smores

RECOMMENDATIONS
- Market the product as something that would be extremely easy to bake, to reduce fears of those who are not experienced with baking

FORECASTED SALES
Bisquick with Chocolate Chips
Purchase Intent:
Definitely Buy: 28% Probably Buy: 44%

Cocoa-To-Go
Purchase Intent:
Definitely Buy: 20% Probably Buy: 20%

Betty Crocker Smores

Purchase Intent:
Definitely Buy: 44% Probably Buy: 20%

Adjusted Intent: 37%

Adjusted Intent: 23%

Adjusted Intent: 42%

Brand Awareness: 50% Availability: 40% Trial: 37% Repeat: 7.4% Market Share Percentage:
.54%

Brand Awareness: 50% Availability: 40% Trial: 23% Repeat: 6.4% Market Share Percentage: .29% Projected Annual Category Sales: 12,439,200 units
Revenue Per Unit: $1.35 per box

Brand Awareness: 50% Availability: 40% Trial: 42% Repeat: 15% Market Share Percentage:
1.26%

Projected Annual Category Sales: 8,860,800 units

Revenue Per Unit: $2.25 per box

Projected Annual Category Sales: 37.317.600 units

Revenue Per Unit: $1.35 per box

Annual Sales Forecast:

$48,699.47

Annual Sales Forecast:

$107,658.72

Annual Sales Forecast:

$634,772.38

Note: See Appendix for calculations

OVERALL RECOMMENDATIONS
Recommendation: Drop
- Survey respondents liked the partnership between Bisquick and Hersheys, but still intended on purchasing chocolate chips separately - Focus group participants did not feel this idea was unique - Would be difficult to establish Hersheys in the breakfast-food category - Not a very profitable endeavor

Recommendation: Drop
- Respondents reacted neutrally to this product - Opportunity does not resonate with the consumers needs and desires - There is not enough of a difference between this product and competing products - Low likelihood-to-purchase percentages - Projected sales forecast is very low

Recommendation: Move Forward

- Ranked highest in survey in likeability, uniqueness, reliability, quality and other categories - Combines a well-known Hersheys association (Smores) with an easy-to-make dessert item - Highest value ratings of the three products - Highest likelihood-to-purchase percentage - The most profitable of the products presented

LAUNCH PROGRAM
Product
Tangible Benefits:
- Appropriate for entertaining at any given time of year - Can be easily targeted toward children or adults - Evokes strong sense of taste, smell, sight; almost all focus group members said the packaging alone made them hungry - High quality associations with Betty Crocker and Hersheys - Leverages secondary equity from Betty Crocker by using the same logo and packaging as the existing Betty Crocker baking mixes

Intangible Benefits:
- Easily accessible to many people through placement strategies - Ranked extremely high by survey respondents in reliability and trustworthiness - Emotional relevance is established through nostalgia and sense of place associated with Hersheys

LAUNCH PROGRAM
Price
- Product should follow the value pricing model

Placement
- Distribute through indirect channels, at retailers like grocery stores - Mass placement recommended to be consistent with brands previous efforts

- Pricing should reflect existing pricing on Betty Crocker products, thus we suggest a retail price of $3.00

Push Strategies:

- Cooperative Advertising: Pay for placement in grocery store circulars - Quantity Discounts: Offer deals to retailers for ordering a certain number for their stores

Pull Strategies: - Advertising

- Promotions - Coupons

MARKET ENTRY STRATEGY

Promotion
IMC Plan:
- Advertising - Print Advertisements: Place in family, parent and cooking magazines, as well as local newspaper inserts - Television Commercials: Create a TV spot emphasizing the sense of nostalgia associated with product, and the same delicious treat without the need for a campfire - Sales Promotion - Offer coupons - 2 for the price of 1 deals to grocery store shoppers - Point of Purchase - Create a point-of-purchase display in the baking aisle to draw attention to the new product; Would work well because Betty Crocker already has one of the largest presences in the baking aisle