Chocolate Hard Candy Industry Analysis

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  • Topic: Chocolate, The Hershey Company, Hershey, Pennsylvania
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Candy Industry Analysis
Purchasing and Buying Behavior

April 19, 2011

Whitney Brooks
Steven Carter
Jordan Creps
Jonathan Holly
Miranda Sinclair

Table of Contents
Executive SummaryPg 3
Market AnalysisPg 4
Customer AnalysisPg 7
Competitor AnalysisPg 8
ReferencesPg 14
AppendixPg 15

Tables and Charts
A-1 Pg 6
C-1 Pg 8
C-2 Pg 12

Executive Summary
This report discusses the detailed analysis of the candy industry, and more specifically the chocolate and hard candy markets in terms of competitors, customers, and the actual market.
The first section will include an in depth look at the industry, the actual products, the competitors and competition among them, as well as events in history that may have affected the industry. Through the analysis of the market, which encompasses but is not limited too; market size, potential growth, and geographical distribution, the results will be used to determine the industry’s stage in the product life cycle.

Further on in the report, the focus changes from the product to the customers who buy the product. Using research data from Simmons Choices and MRI+, certain trends and patterns will be established. They range from demographics to involvement, loyalty to anticipated changes, and attitudes to cultural influences.

The final section will look into the competitive aspect of the specific industry. After listing the major competitors in the field, the report will go into depth as to the specifics of size, market strategies, and market share. Overall the marketing mixes and positioning strategies will be discussed, and marketing mix will be split into the categories of product, price, promotion, and place. Further the attributes that lead to differences between the “major competitors” will be explored and explained.

Market Analysis
Market Environment
The candy industry as a whole is a multibillion-dollar environment, whose job it is to deliver a product that will satisfy customers and meet their needs. Candy can take on many forms and shapes, but perhaps the best-known categories are chocolate, hard candy, gum, and licorice. For the purpose of this analysis we narrowed the field down to the two biggest fields, chocolate and hard candy.

As far as the chocolate and hard candy providers in the industry, there are three main stays whose names are relentlessly linked with the products among a field of many names. Hershey, Mars, and Nestle are the “big three” in the industry and they all simultaneously compete with each other, while at the same time trying to differentiate themselves. They may all offer similar products, but it is the branding and the small differences that set the company’s products apart in the eyes of the customer. Competition is tight; with them each holding a significant portion of the market share, but it is just as difficult for new companies entering the industry. They face a sizeable difficulty with a medium level of barriers to entry standing in their way (IBIS World, 2011).

Aside from just those in the candy industry, there is always competition from outside industries and companies selling products for people with similar tastes. Sweet treats can come in many forms, such as jell-o, pudding, snack cakes, popsicles, etc. A good example is Hostess and their line of snack cakes (Twinkies, Sno Balls, Cupcakes), which all serve as a sweet treat and can be eaten as a substitute for candy (Hostess Snack Cakes, 2011). Overall it is the similar food and drink lines that offer up the most competition for the candy industry.

In terms of the industry and its impact, there are few who doubt the impact ability of candy, but those same people will also tell you that history and time have also impacted the candy industry itself. There have been economic downfalls that affect people’s willingness and ability to buy the product. An...
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