Digital Marketing Case Study. Lauren Gurry. Professor Wendler MKT Dec. 6, 2010

Transcription

1 Digital Marketing Case Study Lauren Gurry Professor Wendler MKT Dec. 6, 2010 Page 1 of 1

2 The Company Milton S. Hershey was raised in a low-class family in Lancaster, Pennsylvania without the benefit of any formal higher education. He was a candy maker s apprentice for four years, and made his first attempt at candy production in 1876 in Philadelphia. When the venture failed, he moved to Denver and was taught by a local confectioner how to make caramel from fresh milk. Hershey returned to the east coast soon after and tried to start up another candy business which soon after failed in New York City. He then returned to Lancaster and successfully started the Lancaster Caramel Company, which would become the Hershey Chocolate Company in 1894 (The Hershey Company). Although the chocolate Hershey produced was originally intended to coat his already existing caramel candies, the company began producing chocolate candies after Hershey purchased candy-making equipment at the Columbian Exposition in Chicago in By 1895, the company was producing 114 varieties of chocolate. Between 1896 and 1899, Hershey worked diligently to develop a milk chocolate formula, and in 1899 he became the first American to produce milk chocolate, creating the Hershey Bar soon after. At the time, milk chocolate was considered a luxury item for the wealthy, but Milton Hershey was able to lower the price with mass factory production, bringing milk chocolate to the common people. The company quickly became successful, employing 1,400 people and shipping throughout the United States and Europe (The Hershey Company). Just five years later, the Hershey Chocolate Company needed to expand its production facilities, sold its existing factory for $1 million, and moved to Derry, Pennsylvania, very close to where Milton Hershey grew up, since it was a rich dairy farming area. With a larger production facility, Hershey s was able to expand its product line, and began with Hershey s Page 2 of 2

3 Kisses in The new candy was successful, and the company trademarked it in In the years that immediately followed, the Hershey Chocolate Company continued to expand its candy line with Mr. Goodbar in 1925 and Krackel in Hershey s also began producing chocolate syrup and chocolate chips in this time period (The Hershey Company). Upon moving to Derry, Pennsylvania, Hershey also decided he wanted to build a company town what is now Hershey, Pennsylvania so his workers would be happy and live in a comfortable environment. His plans for a model community included: housing for varying levels of employees, schools, churches, a department store, trolley system, and so on. Hershey was sure to provide amenities such as electricity and water for the new town s residents, and also included a barbershop and printing press, which began producing The Hershey Press in With the addition of an amusement park, originally intended as picnic grounds and aptly called Hershey Park, Milton Hershey s town also became a popular tourist destination (The Hershey Company). The Great Depression began in this era when Hershey s was introducing new products, but because of its product success, the company did not feel the effects for some time. During World War II, Hershey s produced a special candy bar, the Ration D, for soldiers and also helped produce parts for the Navy s antiaircraft guns. The Hershey Chocolate Company was honored with five Army-Navy E Production Awards for its contributions to the war effort (The Hershey Company). In 1928, Harry Reese s Candy Company began producing Reese s penny cups using Hershey s chocolate as the peanut butter coating. Hershey had a positive relationship, with the wrapper on Reese s peanut butter cups reading, Made in chocolate town, so it must be good! Page 3 of 3

4 Hershey s acquired the company seven years after Reese s death in 1956 (The Hershey Company). Beginning in the 1960 s, Hershey s began branching out of the chocolate market, renaming the company Hershey s Food Corporation in Food companies Hershey s acquired include San Giorgio Macaroni and Delmonico Foods in 1966, and Ronzoni Foods in Hershey s Food Corporation acquired various candy companies over the years as well, including Cadbury s United States productions and the company that originally produced Twizzlers, Y&S Candies (The Hershey Company). According to its Web site, The Hershey Company is currently, the leading North American manufacturer of chocolate and non-chocolate confectionery and grocery products. Hershey s has grown exponentially over the years, now shipping to more than 90 countries worldwide and producing more than 80 brands (The Hershey Company). The Hershey Company s major competitors are not surprisingly all candy companies. Competitors include: Diamond Foods, Lance, Ralcorp Holdings, and Tootsie Roll Industries (MarketLine). The company employs 13,700 people and its net sales are approximately $4 billion annually (The Hershey Company). Page 4 of 4

5 The Brand H.B. Reese was inspired to enter the confectionary business by Milton S. Hershey himself. Reese worked as a foreman on one of Hershey s dairy farms in Hershey, Pennsylvania. Until then, Reese had worked a series of odd jobs to support his wife and 16 children. He admired Hershey s work, and in 1923 he began making candies in his own basement. He named different confections after his children: The Lizzy Bar made of coconut and The Johnny Bar with caramel. These candies experienced moderate success, and in 1928, he put peanut butter inside Hershey s chocolate, making the first peanut butter cup, then called the penny cup because of its cost (The Hershey Company, The History of Reese s Peanut Butter Chocolate ). During World War II, Reese decided to halt production on all his candies except the peanut butter cup. Reese was able to afford advertising after disbanding his other candies, and after the war, Reese s peanut butter cups gained popularity throughout the country. The peanut butter cups were sold to wholesalers, vending machines, and stores. In the 1950 s Reese built a larger factory in Hershey, Pennsylvania to accommodate product depend, and the 100,000 square-foot facility opened in 1957 ( The History of Reese s Peanut Butter Chocolate ). Reese, however, passed away in 1956, about a year before his larger factory opened. In 1963, Hershey s purchased the H.B. Reese Candy Company for $23.5 million. In the decades that followed, Reese s became one of Hershey s primary products, and the company extended the product line to include candies like: Reese s Pieces, Reese s Dark Chocolate, and Reese s Inside Out (The Hershey s Company, The History of Reese s Peanut Butter Chocolate ). Today, Reese s is considered one of Hershey s strongest products, distributed internationally. In the first quarter of 2010, Hershey s increased advertising by 68 percent for core brands including: Hershey s, Reese s, Kisses, Kit Kat, Twizzlers, and Hershey Bliss, and Page 5 of 5

6 the company responded that consumers responded appropriately (The Hershey Company). In the company s 2009 Annual Report, sales growth over the previous year was partially attributed to the Reese s brand: Sales growth was primarily contributed by core brands, particularly Hershey s, Reese s, Twizzlers and Kit Kat, which benefited from our consumer-driven strategy, including advertising and in-store selling, merchandising and programming (Alfonso, Humbert P.). Hershey s most recent commercial for Reese s peanut butter cups position the product as simply perfect to its audience, a position only an already established and popular brand could likely convey successfully (The Hershey Company). Page 6 of 6

7 The Brand s Target Audience The target market for Reese s can most broadly be described as chocolate and peanut butter lovers alike. Instead of a very specific target audience, Reese s appears to be targeting a mass market, appealing to as many people as possible through simple, widely appealing advertisements. When viewing Reese s most recent commercials, which can be viewed on the product s section of Hershey s Web site, it does not seem Reese s is marketing to any specific age, gender, race, socioeconomic class, and so on. In fact, there are not even any people or products present in the advertisements except for the peanut butter cups themselves (The Hershey Company). For example, in one recent commercial, two peanut butter cups are moving toward each other, join, and then spin like gears on the candies ridges. The copy on the screen reads, How do you know when chocolate and peanut butter are combined perfectly? and then, It ll say Reese s on the package. This doesn t appear to be directed at anyone in particular, instead just the mass market that likes chocolate (The Hershey Company). Another example from a recent holidays Reese s commercial shows toothpicks being poked into miniature Reese s peanut butter cups with soft horn music playing in the background. The copy for the commercial reads, If you have toothpicks, you have chocolate and peanut butter hors d oeuvres. The only way the audience would even gather this is meant to be a holiday commercial is in the last frame where there are green and red wrapped Reese s miniatures and a very tiny mistletoe icon. Most holiday commercials are very in your face, but this commercial discretely shows it is meant for Christmas, as if not to detract business from or offend any non-christian customers part of its market (The Hershey Company). Page 7 of 7

8 These commercials could essentially be marketed to any audience with a positive reception, since they are creatively generic. So long as the viewer can read, they are likely the target audience for these campaigns. The ads use product reinforcement strategy, reminding consumers that Reese s peanut butter cups are perfect, come in different forms, and have a special holiday packaging. Hershey s isn t creating a new position for Reese s, and since they are targeting a mass market, their choice of advertising makes a lot of sense. It doesn t just appeal to one type of person, and the adds are simple and to the point, yet clever at the same time (The Hershey Company, Belch, George E. and Michael A. Belch). The only way these advertisements are marketed toward a more specific audience is by means of Reese s and Hershey s digital presence. As previously mentioned, these Reese s commercials can be viewed on its designated section on Hershey s Web site. The brand s other networking presences have adapted similar components. This is obviously much more marketed toward a younger to middle-aged audience since that is the tech-savvy audience using these sites and networks (The Hershey Company, Reese s Fan page, Hershey s Facebook Fan page). Page 8 of 8

9 The Brand s Use of Digital Media for Marketing To discuss Reese s use of digital media, it is only natural to start by discussing the brand s section of Hershey s Web site. The page follows Reese s packaging color scheme of orange and brown and is very simple. The Reese s logo with the slogan perfect and two Reese s peanut butter cups are very large and in the middle of the page. The menu bar is on top and gives the user several options: the home page, products, promotions, recipes and ideas, experience, and shop. The bottom of the page has three large icons linking users to the most interactive and fun pages. Users are invited to make seasonal Reese s desserts, watch the most recent Reese s commercials, and to like Reese s on Facebook (The Hershey Company). Now let us take a closer look at each component of Reese s Web site. The products tab leads users to a page with pictures of every kind of Reese s peanut butter cup that The Hershey Company offers. When users click on the pictures, a larger picture appears, along with a description of the given candy. The next tab, promotions, leads users to the Reese s Loves you Back campaign, in which consumers have their chance of winning part of the $2 million total prize. The contest is simple: Consumers buy specially marked packages of Reese s, and inside there can be a game piece worth either $10, $25, or $100 (The Hershey Company). The recipes and ideas tab leads users to two options during the current holiday season. The first linked icon brings you to any-time recipes, such as marbled peanut butter brownies and chocolate peanut butter milkshakes. The other linked icon brings users to holiday ideas, and they then have three choices: seasonal products, holiday recipes, and Reese s craft ideas. When users go to the product section, they can view every product Reese s offers for each of the holidays: the winter holidays, Valentine s Day, Easter, and Halloween. The seasonal recipes on the site currently include Foolproof Fudge Cutouts, Peanut Butter Cutout Cookies, and Peanut Butter Page 9 of 9

10 Cup Lover s Cheesecake. The craft sections gives users instructions for how to make crafts like a Reese s Christmas tree, Star of David ornament, and also Reese s decorated gift boxes (The Hershey Company). The next tab, experience, brings users to what can be considered typical digital marketing. As previously mentioned, users can watch the current Reese s television commercials in this section of the site. Additionally, you can view Reese s posters; each have the traditionally Reese s colors, logo, slogan, Reese s cups, and also some kind of catchy phrase. Two examples include: Sharing is a nice gesture. Stupid. But nice, and also, Chocolate and peanut butter walk into a bar. The rest is history. Users can also download these images off of the Web site to use as desktop wallpaper on their computers. The last option in the experience section allows users to scroll through fast facts like when National I Love Reese s Day is that are on a digital peanut butter cup (The Hershey Company). The last tab, shop, offers users the opportunity to do just that. There are different mugs on the page, along with a car and truck set, a pillow, a collectible football, an ice cream bowl, and a Reese s-filled tote. Clicking on the images brings users directly to Hershey s online store (The Hershey Company). Now we can go back to the homepage, where as mentioned earlier, there is a large icon directing users to Reese s Facebook page, which has more than six million fans. Reese s Facebook wall is filled with Reese s commercials, contests, and status updates all with hundreds or thousands of likes and comments. The wall also discusses a Halloween contest conducted by Reese s Facebook page, in which users submitted pictures of themselves with Reese s while in their Halloween costumes. Reese s also celebrated reaching five million fans with a video on how to make your own Reese s flag showing your support. In the page s Page 10 of 10

11 photos tab, Facebook users can view all the different Reese s products and Halloween contest pictures; there are also fan-submitted pictures on the page (The Hershey Company, Reese s Facebook Fan page). In the videos tab, you can view Reese s television commercials, just as on its Web site. Some of the commercials are the same as on the Web site, but others cannot be viewed on the site. This includes the Reese s flag video previously mentioned, a DJ Reese video, and a series of videos with a NCAA Tournament theme. There is a different commercial for the sweet 16, elite eight, and final four. At the end of the final four commercial, we learn as an audience that Reese s is, A proud partner of the NCAA, meaning that the NCAA was also probably promoting Reese s in some form during the tournament (Reese s Facebook Fan page). Reese s has also made use of several other Facebook features. The brand has posted notes about its products, and enabled a discussion board for fans. Fans have posted such topics for discussion as favorite Reese s products and ideas for what products Reese s should create next. Reese s has also created events to invite fans to, such as the Reese s Loves you Back contest, and Pieces Wrapper Rewards. Reese s itself is also likes 14 pages, including: Hershey s, Hershey s Kisses, Hershey s Bliss, Jolly Ranchers, Twizzlers, Pieces Candies, and Reese s Racing (Reese s Facebook Fan page). Reese s Facebook homepage is similar to its Web site. There is an orange graphic with Reese s and the perfect slogan. The page links you to other places Reese s has a digital presence: its Web site and YouTube channel. The color scheme is, of course, similar to that on Reese s Web site and Facebook page. On the YouTube channel, you can view all of Reese s current commercials, but you can view classic commercials as well about how different celebrities and average people eat their Reese s. There is also a section to view videos YouTube Page 11 of 11

12 users have created about how they eat their Reese s; they can additionally post fan videos and songs to the channel, making the page very interactive (The Hershey Company, Reese s Facebook Fan page, Reese s YouTube Channel). Since Reese s is a brand under The Hershey Company, it is also important to discuss Hershey s digital media presence. The Hershey Company s Web site is the go-to site for all brands of Hershey s candy or information. The site will show you all of the candy products once you pick a brand to view; it also provides nutrition information, career information, recent news updates, and business information. However, the site does not lead you to any kind of social networking component (The Hershey Company). The Web site Hersheys.com does lead users to a Facebook fan page and has an option for users to share on social networking sites including: Facebook, Twitter, MySpace, Digg, Reddit, Mixx, Stumble Upon, and Del.icio.us. The catch here is that Hersheys.com is for Hershey bars and original products like Hershey s syrup; the site is not for the company itself. However, it almost appears the Facebook page the site leads users to is, in fact, for the whole company. The info section mentions each of Hershey s core brands, including Reese s, and Hershey s lists several Reese s events on its event list. On the other hand, all of the wall posts are about Hershey bars and candies in particular, there are only Hershey bar videos, and the page links users to the Hershey product site mentioned previously. After a Facebook search for The Hershey Company, it appears the company itself does not have its own fan page (Hershey s, Hershey s Facebook Fan page). Now that all of Reese s digital initiatives have been introduced and discussed, subjects such as objectives, audiences, and marketing techniques and appeals can be discussed. It has already been concluded that digital marketing especially social networking is for a younger Page 12 of 12

13 generation, but that this generation s parents have definitely become part of the scene, too. With its digital presence, Reese s is marketing itself to only a segment of its market the younger generation as opposed to the whole market, including very young children and the elderly. The need for a digital presence has become apparent in recent years, as discussed in class. Young generations are more and more unphased by all of the marketing clutter that surrounds them, and since Americans are spending more and more time on social networking sites, it is the next logical place to break through the clutter and get into consumers minds (Belch, George E. and Michael A. Belch). This leads into the objectives Reese s is trying to obtain with all of its digital marketing initiatives. Of course, the end goal is always eventually for your product to be bought by the consumer, although Reese s is not imploring consumers do so. Instead, Reese s is striving to reinforce its brand image through all of its integrated marketing discussed: Web site, Facebook page, YouTube channel, and television commercials. Reese s isn t trying to convince you how good its peanut butter cups are; instead it s reminding you how perfect you think the product is. Then, the brand takes its positioning to the next level buy building a relationship with its consumers (Belch, George E. and Michael A. Belch). The point of social networking, Facebook in particular, is to stay connected to your friends and family. When users like Reese s, they get all the same updates in their newsfeeds as they would from their actual Facebook friends. So, a Facebook user would see all of the videos Reese s posts, pictures to accompany their contests, and statuses about their products and promotions. The statuses often ask users questions, encouraging them to interact with Reese s so the brand knows what you think. Through all these updates and special Facebook contests, Page 13 of 13

14 Reese s in building a relationship with the Facebook users who like the page (Reese s Facebook Fan page). While building a relationship with Facebook users, Reese s is also using Facebook as a promotional tool. A Facebook fan page in and of itself is now often used as a promotional technique for brands and products. With every status update or video post, Reese s is promoting it brand and business. When users read any of Reese s info, view pictures, or watch videos, Reese s is getting free publicity through Facebook. Facebook readers who like Reese s are helping promote the brand themselves, as it is often suggested on Facebook s side panel that users like something many of their friends do, too (Reese s Facebook Fan page). Reese s used several different advertising techniques and appeals on its Web site, Facebook page, and YouTube channel to garner consumer attention. In its posters and commercials, Reese s is primarily utilizing a humor appeal, in addition to animation techniques. The animation techniques are used to make the peanut butter cups move and look like they re being bitten little by little. As for the humor, the ads always contain some kind of witty phrase like, Chocolate and peanut butter walk into a bar. The rest is history. Candy is not considered a dangerous product, so using a fear appeal would not be appropriate. An emotional appeal could have worked, especially since it is currently the holiday season, but these ads are a wiser, more cost effective choice because they can be used for a greater span of time and deliver the brand s message simply (The Hershey Company, Belch, George E. and Michael A. Belch). All of the advertisements also position Reese s by quality, using the slogan perfect. Reese s does not compare itself to any other brand by a certain attribute or even mention any kind of comparison. Reese s is an established brand with established product, so it s unnecessary to compare Reese s to other candies since almost everyone knows what it tastes Page 14 of 14

15 like. As far as the slogan perfect, it likely works in the brands favor. People who don t agree will ignore or forget the ad, while people who like Reese s or agree they re perfect will remember the ads and be more apt to buy Reese s the next time they re at the store (The Hershey Company, Belch, George E. and Michael A. Belch). In its Facebook marketing, many different advertising techniques can be picked out, depending on what it is the user is paying attention to on the page. For example, a status update from Thanksgiving reads, Happy Thanksgiving! Who followed up their turkey dinner with a Reese s peanut butter cup? This can be considered an emotional appeal, positioning by cultural symbol, or a slice of life example. The update can be called an emotional appeal because the brand is wishing you a happy holiday, and there are positive feelings associated by merely wishing someone a happy holiday. Thanksgiving dinner, namely the turkey, can be considered a cultural symbol for Thanksgiving, since it is the image most people conjure up when thinking about Thanksgiving. The status update could, if you stretch it, also be considered a slice of life, since Reese s is providing users with the image of a family holiday dinner (Belch, George E. and Michael A. Belch, Reese s Facebook Fan page). A clearer slice of life example can be observed in Reese s Halloween contest mentioned earlier. Users submit pictures of themselves in their Halloween costumes, eating a Reese s. By simply submitting one of these pictures for others to see, users are letting other people see a component of their lives, be it the costume, how the picture was taken, the background in it, or so on. Celebrating Halloween by dressing up is also a slice of life because everyone has had a series of Halloween costumes in their lifetimes, and they appreciate seeing others dressed up, too (Belch, George E. and Michael A. Belch, Reese s Facebook Fan page). Page 15 of 15

16 Analysis & Critique Overall, the coordination of Reese s digital media is impressive, and it is clear Reese s digital media is incorporated into its integrated marketing communications. Everything on the web follows the same format and color scheme: orange, yellow, and brown colors; the Reese s logo is always present; the slogan perfect is clearly placed. Not only do the print and televisions advertisements follow this same pattern, but they are also simplistic, as is the case with Reese s Web site. The print and television ads also appear to be the same, with a few exceptions for either medium (Reese s, Reese s Facebook Fan page, Reese s YouTube Channel. Since Reese s is clearly using integrated marketing communications for its advertising campaigns, it is important to consider what we don t see in the advertising, too. A good example of how else Reese s is or should be integrating different marketing strategies is the brand s promotional campaigns. The Halloween photo contest is an excellent way to have a promotional campaign on Facebook, and it s something that hasn t gained tremendous popularity on Facebook, yet. It gets users involved without Reese s spending an exorbitant amount of money, which is part of viral marketing has become so successful. Although the contest engaged current Facebook users, it did not attract new users or fans to the page. This could have easily been done through a television commercial about the contest that mentions you need to be a Reese s Facebook fan to win. However, a commercial would cost a good sum of money, and avoiding this cost was probably why the contest was for Facebook users only. (Reese s Facebook Fan page). Reese s also conducted its Reese s Loves you Back contest this year, but it is unclear if there were any print or broadcast ads to support the campaign. There are no Facebook advertisements supporting the campaign, and there are no commercials for it on Reese s Web Page 16 of 16

17 site, Facebook page, and YouTube channel. Reese s certainly had specially marked packaging because the information on Reese s Web site does explain the campaign s rules and mentions the packaging. To generate more buzz about the contest, Reese s could have put broadcast commercials on television and all its digital sites. The brand also could have partnered with another company, like Monopoly does with McDonalds, to generate buzz from different directions and attract different audiences (Reese s Facebook Fan page). Although Reese s has an impressive digital presence, there are still some areas in which the brand can clearly build and improve. Neither The Hershey Company nor Reese s has a Twitter page, which is currently the most popular social networking site, aside from Facebook, although there is a Twitter page for careers with Hershey s. Neither Reese s or Hershey s has a large presence on other sites like Digg, Redditt, Del.icio.us., and so on. On the Hershey s candy site, you can share information on all of these sites, but The Hershey Company and Reese s do not do their own campaigning on them. A final way Reese s can improve its digital presence is by means of a blog. The brand could implement a peanut butter lover s blog, or something of that sort, where people can post recipes, discuss different candies they like, and so on. Over time, Reese s is bound to increase its digital marketing exponentially, and we can only guess right now what digital marketing is in the future. Page 17 of 17

18 References Belch, George E. and Michael A. Belch. Advertising and Promotion. New York: McGraw Hill, Textbook. Hershey s. The Hershey Company Web Nov Hershey s. Fan page. Facebook.com Web. 27 Nov The Hershey Company. The Hershey Company Web Nov The Hershey Company. MarketLine Web Nov Humbert P. Alfonso. The Hershey Company Form 10K. United States Securities and Exchange Commission. 19 Feb Print. 2 Dec Reese s. The Hershey Company Web Nov Reese s. Fan page. Facebook.com. 27 Nov.2010.Web. Reese s Channel. YouTube.com Web Nov The History of Reese s Peanut Butter Chocolate. Articles Base. 13 Feb Web. Page 18 of 18