Marketing pays off in increased sales
By Kirsti Scott
Even in a time of greater price sensitivity, the combination of increased marketing spending and a focus on core brands helped Hershey boost fourth quarter net income by 51%. AdAge.com took a look at how the Boost in Ad Spending Pays off for Hershey.
Key points include:
- Hershey increased marketing budgets by 23% in the fourth quarter and 26% during the year. Hershey’s CEO, David J. West, predicts a 20 – 25% marketing increase for 2009.
- The company focused on promoting core brands such as Hershey’s and Reese’s and will be expanding marketing of other key brands in 2009.
- Hershey is benefiting from consumers choosing basic brands over premium chocolates, though Hershey’s “indulgence” brand of Bliss has performed well.
- Chocolate is a “high-involvement category” so consumers won’t abandon it totally during down times, but it makes sense for Hershey to pull back on marketing its higher-end products at this time.
What lessons can you take from Hershey’s experience and apply to your company during a recession?
1. Don’t cut back on marketing.
2. Focus on promoting your core capabilities.
3. Concentrate your marketing on products and services that your customers always need.
Tags: Marketing
February 9th, 2009 at 4:52 pm
It has also helped that Hershey’s still uses their “nickel bar” method. The price remains the same ($.05), you just get fewer ounces of actual chocolate… Just like cereal boxes nowadays are the same height and width as usual – just half the depth (and thus cereal…) as before. Anyway, other “tricky” ways to market and make money in lean times.
February 13th, 2009 at 8:53 pm
Hi there. I am going to check it, since I saw a comment in another site regarding \”Marketing pays off in increased sales: Marketing news, trends, and expertise from Scott Design\”. Someone related to hershey chocolate products. Thanks anyway.