marketing

Chocolate War

chocolate-war

Source :

Sumarwan, Ujang, dkk, “Pemasaran Strategik : Strategi untuk Pertumbuhan Perusahaan dalam Penciptaan Nilai bagi Pemegang Saham”, Inti Prima, Jakarta, 2009.

pemasaran_strategik

Discussed Chapter : Chapter 2 Price

Concept 1 : Premium Price, page 45

The video explanation discussing that concept :

Hershey’s and Mars were partners, but they competed each other in  chocolate industry. Mars ordered chocolate to Hershey’s for coating M&M’s.

mm

Others product launched by Mars were  Milky Way (mily chocolate with gummy caramel inside), Snickers, and 3 Musketeers.

milky-way_snickers_muskeeter

While Hershey’s products were Milk Chocolate Bar, Hershey’s Kiss, Hershey’s Miniature, Hershey’s Drop, and  Hershey’s Nuggets.

milk_chocolate_bar

“Never stop to innovate.” was a Mars’ owned principe which was a newcomer in chocolate industry compared to  Hershey’s which was the king of chocolate industry. The increase of cocoa bean price forced Hershey’s to increase the price. The premium price of Hershey’s were from 1 nickel to 1 dime. Mars looked that case as an good opportunity. The conflict started to happen when Mars decided to make the coating chocolate by itself for creating competitive competitor price, which it was smaller amount of price compared to the premium price of Hershey’s. Mars wanted to do market expansion by making chocolate  candies at high quality, but still having affordable prices.

mm_expansion

The stated price of Godiva Chocolatier was a premium price cause more than the stated price of benchmark. The premium price was popular as relative price. The price of Hershey’s and Mars’ product were benchmark prices if compared to the premium  price of Godiva Chocolatier’s product which far higher.

godiva_chocolatier

The power market of a product, mainly appears in the volume change context and market division, by comparing the price of a certain product with average price in the market.

Concept 2 : Segment Pricing, page 62

The video explanation discussing that concept :

cocoa-beans-and-chocolate-bar

When there was a high increase of the price of cocoa bean as the basic material in chocolate industry, Hershey’s increased its price from 1 nickel to 1 dime. But Mars still maintained its normal price. Accordingly, the price of Mars was far cheapper because the customers of Mars were sensitive to the price.

desert_bar_hersheys

“Having a business with military side is a huge business.” The segmentation of  Hershey’s was military side. Caused of that, Hershey’s created a special chocolate product named Desert bar having specificity not melt at the temperature of 120 to 140o Fahrenheit. Generally chocolate products will melt at the temperature of  85 to 88o Fahrenheit. Hershey’s also supplied the chocolate to military side which the biggest consumers of Hershey’s.

hersheys_military

Mars wanted to grab the profitable  Hershey’s agreement with military, but it had not succeed yet. Accordingly, Mars diverted its marketing target to children. Mars was brave to do an agressive marketing and formed new market segmentation by advertizing media such as the cartoon characters on television. Those cartoon characters were an action of positioning, a planting of image in the mind of potential customers by tagline“chocolate melting in the mouth, not on the hands”. Caused of that, it could take the hearts of mothers for spoiling their beloved children by giving them M&M chocolate.

mm-war

The Mars strategy was  a brilliant by supporting the logistic of military. Mars succeded in grabbing the  chocolate agreement with military side. Market based pricing is a main intention of market segmentation.

et-reeses-pieces-bag

But Hershey’s succeeded to expand the market segmentation  until reaching Hollywood by sponsoring the production of E.T film increasing the selling of Hershey’s.

et

Godiva is a segment having non sensitive price. Caused of that, it had different  segment pricing. The customers still purchase it although Godiva is more expensive than Hershey’s and Mars. The customers still purchase it not just caused they need the sugar contains in those chocolate candies. But cause the product offers different experience which it is exclusive. Hershey’s and Mars were offered in  supermarket and stores, but Godiva were offered in the exclusive boutique chocolate.

godiva

There is also a small scale chocolate company owned by Bover family keeping to stand between the domination of Mars and Hershey’s although in limited condition, such as the age of machine has been more than 40 years and its condition is decreasing time by time. The machine is operated manually.But Bover still  has certain customers loving the local chocolate product having unique characteristic touch. Bover has also loyal customers which non sensitive to price.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s