"Hershey to increase ad budgets for key brands"

By Stephanie Thompson

Advertising Age, October 29, 2001

        This article dealt with the restructuring of advertising funds within Hershey Food Corporation.  In the recent past, more than half of Hershey’s ad spending has gone to produce advertising for only to products that only generate 30% of the companies over all revenue.  Hershey Foods Corp.s’ new President-CEO Rick Lenny had this to say: “Hershey has not been leveraging its “scale brands,” spending only 3.8% of net sales on advertising in 2000 vs. a food company average of 6.3%”

            The main plan on how to gain this extra revenue stems from a restructuring of the budget within the company itself.  This will be done by taking money from lesser brands, meaning brands that do not generate as much revenue as the top selling brands such as Kisses, Hershey’s Bars, and Reese’s.  It plans to invest half of its newly restructured budget of 65 million into this new advertising.

            The company is also doing research into “building efforts around ‘big events’ such as a 2002 tie-in to ET, for its Reese’s franchise.” 

            Hershey plans on gaining more effective marketing by focusing on the top 200 items of its over 1,800 item inventory of products.  Those 200 top sellers have made up 59% of the top sales of the company.

            This article, in itself, is nothing more than business strategy at its basic elementary level.  The idea that it is concerning one of America’s most well known and well loved companies, makes it more appealing to the mass audience. Who wouldn’t know to know more about the countries most beloved chocolate maker?