Monday, October 23, 2006

Hershey says trade promo works ...

... but investment analysts (and Ad Age) disagree.

At least that's what I got from this article.
Wall Street be damned, Hershey Co. is sticking by its theory that in-store marketing and promotion works better than advertising.

Despite a slew of questions from analysts suggesting a link between the chocolate giant's recent decrease in ad spending and its lower-than-expected third-quarter sales, Hershey President-CEO Rick Lenny was adamant that Hershey's increase in consumer marketing next year will happen "closest to the point of consumption." Translation: in store.
The analysts are concerned about a quarter in which Hershey grew less than expected. However, their results have been consistently good over the past several years, as even the critics concede, saying that it's "hard to overly criticize Hershey given they've had such a good 3- to 4-year record."

Hershey's boss told the analysts:
"Marketing-mix modeling still reinforces that trade [spending] has the highest level of return on investment and then within consumer support ... those [efforts] closer to the point of consumption and point-of-sale tend to have the higher return," Mr. Lenny said in a conference call with analysts. In general, he said, Hershey uses advertising to create awareness for new brands and new platforms, but views in-store support -- whether through sampling or through activities tied in with retailers' own strategies -- as the best way to capitalize on those high-return investments.
Music to my ears.

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