Market segmentation is the process through which Hershey decides to segment the overall

market in smaller segments and groups that have similar attributes, buying behaviour, socio
economic background, etc. This is done to reach out to the group of consumers more
efficiently and effectively.
Some of the most popular ways of consumer and market segmentation are –Geographic
Segmentation:

Demographic Segmentation: is dividing market segments with different needs, characteristics

Geographic segmentation is dividing the overall market based on different geographic units
such as – countries, continents, zip codes, states, trading blocks, cities, and neighborhoods.
Geographic segmentation is highly efficient for Hershey in the international markets because
the prospective customers have different culture, preferences, and administrative systems.
Secondly, if the cost of transportation is critical cost in the value proposition delivery then it
is prudent to do geographic segmentation as the costs of serving customers in different
locations will be completely different. The primary consumer of Hershey’s lives in all the
states of the US, 85% of their market share is in the United States.

Psychographic Segmentation: lifestyle oriented interests, activities, and opinion, are placed
under psychographic variables. Hershey can use psychographic segmentation to divide the
potential buyers into different segments based on – personality characteristics, buying
patterns, consumption opinion, opinion on social issues, leisure activities, hobbies, and many
other dimensions. Psychographic segmentations are effective because people in the same
demography can have different psychographic characteristics based on individual life
experiences and growing up environment. One of the most widely used consumer behavior
frameworks to do consumer psychographic analysis is –
VALS - A widely used segmentation method that classifies America’s adult population into
eight distinctive subgroups: innovators, Thinkers, Achievers, Experiencers, Believers,
Strivers, Makers, and Survivors.
Behavioural Segmentation : divides buyers into groups based on their - attitudes, product
knowledge, product uses, and other responses to a product. Many marketing experts believe
that behavior variables are a good starting point to build consumer segments. For example for
any service – Freemium model is a far more effective segmentation strategy than geographic,
demographic, or psychographic. The behavior segmentation can help the organization to
focus on key features, and provide the consumers with features that they are more likely to
use. Continuous engagement leads higher customer satisfaction rates and high net promoter
score.
With adults accounting for the largest percentage of chocolate bar sales and with the
increased interest in healthier foods, Hershey’s segmentation should cover:
 Promoting the health benefits of their dark chocolate products.
 Help in changing the mind of customers as to chocolate being an unhealthy snack.
 Increase potential sales through promotional programs throughout the year.
 Repackage so that the new look appeals to the consumers since it will be tagged as “low-
calorie.”
Target Market
 Parents like to buy the Hershey’s chocolate products for their children and play a
large role in introducing the Hershey’s chocolate products. Hence, the children
market, youth market and adults market are very important for the Hershey Company
because this three targeted markets generate a lot of profit to the company and the
company needs to use the demographic segmentation to stay ahead of the
competition.
 Consumers constantly change their preference for products, so it’s no big surprise that
consumers’ wants for chocolate products has changed as well. They want a greater
variety, which enables the industry to expand on their product line. This provides an
opportunity for greater sales of the new product. With the health trend over the past
decade, studies have shown that dark chocolate provides health benefits such as
cardiovascular benefits as well as reducing an adult’s chance of cancer. Non-
traditional holidays as well as traditional holidays offer an opportunity to market
specialized products tailored for a specific holiday while providing for the opportunity
for specialized gift products to increase sales.
Positioning: is defined as the image of a particular product or service as seen by the
consumers that are created by the marketer through promotional activities. An effective
positioning builds up an image of the company in the mind of the consumers. The positioning
and differentiation in the product will create a value proposition for the business and helps to
create a competitive advantage that reduces competition.In order to face competition,
Hershey has to bring some differentiation in its product quality to create a better positioning
in the minds of the consumers. By providing different flavors to their candy bar could cause
an increase in the effectiveness of their product in the mind of the consumer. he Hershey
Company has to make changes to their product quality and product flavours in order to face
the competition and build a better positioning in the minds of target customers. For instance,
the Hershey Company has come out different flavors such as Hershey’s Milk Chocolate,
Hershey’s Special Dark, Hershey’s Pure Dark Chocolate and others to increase the
effectiveness of the chocolate products in the minds of customers. The value proposition of
the chocolate products is the increase in customer satisfaction by implementing the
suggestions of customers in the flavors of chocolate products. Different flavors and high
quality of the chocolate products can deliver more benefits that are not provided by
competitors to the target customers. Besides, the Hershey Company’s brand promise is
“Bringing Goodness to the World” which means that the company promises to carry out
longstanding programs to help and support children in need and commit to good business by
operating fairly, ethically and sustainably to make a positive impact on society. Thus, a good
positioning statement can helps Hershey’s customers differentiate Hershey brand from
another brands.
3.1 Three Levels Of Product For Hershey Kisses:
3.1.1 Core benefit
The core benefit of Hershey’s company is provides chocolates good for health. Especially
dark chocolate, many researchers proved that dark chocolate reduces body mass, prevents
blood clots, improves numeracy, may prevent cancer, and doesn’t ruin your complexion. A
part of the article below can give a clearly evidence “Eat one Hershey’s dark chocolate bar
per week, and your risk of heart disease will decrease, a 2008 study found. About 6.7 grams
of dark chocolate per day keeps the blood inflammation-inducing proteins away. Just like
your mother always told you”
3.1.2 Actual Product Quality: High
Hershey chocolate products make from 4 main high quality ingredients: cocoa , fresh milk,
sugar and nuts.
Packing: Plastic wrap, paper
Feature : Colourful, many shapes, clear labels with true information
3.1.3 Augmented Product
Good customer care and service with fast shipping, return product.
3.2 Product Classification
Hershey's has been around since the 1900's and is now one of the most recognized chocolate
companies in the world and as well as a leader here in the United States. Since its beginnings
its product mix has grown significantly since they have branched out into other categories
besides chocolate such as gum, mints and snacks.Their products can be categorized as
convenience products because they are relatively inexpensive and are widely available in a
variety of stores across the nation.