Instituto Tecnológico y de Estudios Superiores de Monterrey

Campus Estado de México

TE 3. Benchmark, value proposition, differentiators, and competitive advantages

Kisses and the Brand Management Decisions

Competitive Market Definition

Anna Elena Francke Hubbard

Group 202

A01378194 | Luis Gerardo García Peña

A01378339 | Daniela Saknite Cruz Villagomez
A01378356 | Valeria Velasco Castañeda
A01750218 | Regina Macedo Flores
A01750432 | Vania Valencia Benítez
A01379268 | Andrea Rico Torres
Activity instructions

According to the information presented in the problem situation and the conceptual and
procedural contents of the class sessions on this topic:

1. Mention the main trends (technological and non-technological) of the

industry in which the company is in the problem situation and present how
these trends affect its marketing plan.

2. Mention according to the problem situation, the direct competitor (s) of

Hershey's brand (work with those mentioned in the case), their points of
differentiation, and competitive advantages.

3. Identify Hershey's value proposition and its competition (make a

comparison table with the brands mentioned in the previous point). To
complete the table, you can rely on reliable secondary sources or on the
websites of the competing companies in question.

4. Identify and describe the current positioning of each brand.

5. Make a positioning map (2-4 variables) with the mentioned brands. Use the
insights (findings) from the in-depth interview.
a. Include additional competitors
b. Identify positioning source/base

6. According to your analysis, do you consider that Kisses's value proposition

should be changed? Justify your answer.
a. Based on the analysis carried out, update the value proposition, and
define the new positioning of the brand.

7. Propose a communication strategy for Kisses brand, based on the proposed

new positioning and aligned with the company's strategy (main message, the
media, etc.)
 By identifying what makes unique or differentiates your product more than the
others, you are already one step ahead of your competition. That's why, is important to
know how to establish the image or identity you want to show off your brand so that
consumers perceive it in a certain way and to then create a successful marketing
strategy.

A competitive benchmark is an effective method to monitor competitors motion

and long-term strategies, look for trend data and measure how others are
performing.

In this report we are going to present where the Kisses company stands against
the competition and the overall market, this for being able to get a clearer
understanding of your market position, identify your value proposition and to
uncover potential opportunities to finally create an effective communication
strategy.
Main trends that affect the chocolate industry

Intense flavors
During the past years, the chocolate confectionery industry has been driven by a
high demand of intense flavors. Things like adding more cocoa, nuts or darker
chocolate to some products, acts that strengthen the core flavor of the treat, are now
a thing. On the other hand, chocolate bars have started to be auditioned with spicy
ingredients to create an innovative and different experience for the consumer. Both
techniques allow the products and manufacturers to offer a more intense flavor that
lets the consumer experiment and keep discovering new things.

Low-calorie chocolate treats

Nowadays consumers ask for low-calorie treats which fit with their healthy and
balanced lifestyle. From this point chocolate and confectionery companies have been
pushed to manufacture treats reduced in sugar that in a portion do not exceed
approximately 100 calories. This trend has driven these companies to change or
restructure their formulas to keep their delicious flavors by making them more body
friendly. Another alternative that has been found is to shrink the pack size of chocolate
bars or candies so the consumer takes in the right amount of nutrients, ingredients and
calories.

Vegan candy bars

As the interest and focus in vegan diet grows driven by a health and/or
environmental motivator, chocolate confectionary companies have been working on
manufacturing non-dairy products and pointing them out to the customers. In fact,
many products have always been vegan, the thing is that companies have now to point
this characteristic out so customers are aware and keep consuming their confectionery
products. This trend includes the growth of the commercialization of dark chocolate
and the creation and expansion of non-dairy milk use for manufacturing milk
chocolate.

Condition-Specific Chocolate Bars

This trend involves that chocolate bars are starting to contain components as
botanical ingredients which transform the product into a useful snack for supporting
everyday health and enrich the flavor. A botanical ingredient could be herbs, fruits,
flowers, seeds or roots that are proven to be beneficial for an specific area or condition
 of the human body, as stress and cramps. A very popular and used example is matcha
which helps with avoiding inflammation, increasing fat reduction, and improving
physical performance among other benefits as it has nutrients and antioxidants.

Sustainable sweets packaging

With the responsibility of taking care of our environment and planet customers not
only focus on the product itself but also on its packing. This leads them to a
complicated and long research, as most sweets and treats are packed with
non-eco-friendly materials. The demand of compostable or handmade packages has
increased in this industry as confectionary packages normally have a short life cycle
which leads consumers to look for more sustainable options. It's expected that this
trend will continue to grow so big chocolate and confectionary companies should stay
ahead and prepare for an eco-friendly transition around their products. Which could
include compostable, paper-based, or plant-based packages, and some could even
start to be made with recycled materials.

Ruby chocolate
A new type of chocolate has been created in Belgium and is conquering the world.
It is naturally pink, one of its main attractions and unique characteristics. It has an
intense aroma and a somewhat fruity, fresh taste and does not have the characteristic
bitter notes of the purest chocolate. It is frequently consumed pure or used to prepare
different confections, icecreams, cakes, and desserts. Since its discovery and after a
few years of investigation ruby chocolate is acclaimed by the market so that the
demand has been rising constantly. It is a discovery and product that has come to
revolutionize the chocolate industry in an unexpected, elegant, and innovative way.

How these trends affect the marketing plan

Trends are constantly changing so it’s essential for a business to identify and
understand the ones that have or will have an effect on their business performance
and future. The trends mentioned above affect the chocolate industry directly and
it's essential for a company, in this case Kisses, to take advantage of them. Talking
about the market diagnosis, these trends help the company understand its
surroundings, and analyze its interior to see if they are being implemented or where
they could be included. With these it is easier to understand the target market
because they complement the segmentation, insights, and drivers. Vegan, ruby, and
low-calorie chocolate along with the other trends mentioned before talk about the
 actual characteristics of the product and are based on the customer buying
processes and evolution of the industry. This makes Kisses analyze the attributes of
their product(s) and change them (which is the most drastic decision), or highlight
the existent ones. Action that will lead the brand to reinforcing its marketing and
brand objectives, and positioning as the market evolves and takes a turn into a more
healthy and environmental mindset. Taking in account these trends and including
them in the process of structuring the brands marketing plan, are essential for the
promotion of the product as its a tool to reach the target market in a more efficient
way. Finally, they will make Kisses have a more actualized competitive advantage that
still has the essence of the brand but communicates that it is focused on the future
and its market needs and desires.

Main Competitors

The mexican market is mainly led by multinational companies like Mars, Nestle, Ferrero,
Kraft Foods and Hershey’s whose brand positioning is primarily based on their image and their
distribution channels. Even though their products are very similar in essence, all these brands
managed to develop a concept around the product in order to differentiate between each
other.
- Mars: Mars has a really clear vision of what they want to achieve with their products, all
of them are created with the idea of making people smile and bringing moments of joy
to them. The main Mars's brands that are in direct competition with Kisses are Snickers
and M&M´s.

- Snickers: when we talk about Snickers it is hard not to think of their slogan
“You’re not you when you are hungry”, which is one the most important
competitive advantages this brand has. In addition to it, the perception the
consumer has of this chocolate as a snack that gives energy and helps you with
the hunger has also helped them to differentiate from their competitors.
 - M&M´s: when we focus on the main differentiation points that M&M's has as a
brand we need to talk about their shape and its popular colors and flavors. The
small size of this chocolate helps them to position themselves as an easy to eat
and helps them to differentiate from competitors. This differentiation can also
be seen as a competitive advantage, because it's a really special characteristic
this brand has than no one else does. Another advantage that needs to be
considered is their candy shaped mascots which are used in their
advertisements to portray different flavors and different personalities for the
candies.

- Nestlé: Nestlé focuses all of their efforts and resources on unlocking the power of
food which they trust can make a big difference in the lives of people. The main
Nestlé´s brands that are in direct competition with Kisses are Carlos V and Crunch.

- Carlos V: this brand maintains a differentiation strategy based on the price of

their products. This chocolate is perceived as an economic but delicious product
that also comes in a really practical package. The basic characteristics of the
product have turned to be their most important competitive advantage.

- Crunch: with this chocolate brand we find a different competitive advantage than
the ones we´ve seen before. Crunch's main competitive advantage is its flavor
and recipe, milk chocolate and crunchy toasted cereals is what makes this
chocolate so irresistible and what has created a differentiation among their
 competitors. Added to this, Crunch is an easy to eat chocolate thanks to its
thinness which also helps it as a differentiation point.

- Ferrero: Ferrero is a familiar company with values that had been within it for
generations, this helped to create a company with a strong culture based on respect,
integrity and innovation and their purpose “We care for the better” is a perfect
reflection of them. The main Ferrero brand that is in direct competition with Kisses is
Ferrero Rocher.

- Ferrero Rocher: this chocolate brand has a differentiation strategy based on the
image and perception the consumer has over the product. Ferrero Rocher is
seen as an elegant, fine chocolate, which would only be given to people who are
very special to you; this competitive advantage comes along with the packaging
of the product. As another part of its differentiation points this chocolate has
the quality of the product and its flavor.

- Kraft Foods Mondelez: Mondelez is a brand new company that has been built with
the approach of creating joy and bringing delicious moments to their consumers lives
with their food brands. The main Mondelez´s brands that are in direct competition with
Kisses are Milka and Toblerone.

- Milka: the competitive advantage of this chocolate brand is based on the

ingredients this one has. Milka is well known for using alpine cow milk for its
chocolate and since this type of milk is considered high quality, the chocolate
 itself is high quality too. In addition to it, this brand uses the image of a purple
cow to differentiate its chocolate from the others, since purple is not a common
color among chocolates packages.

- Toblerone: when we think of Toblerone it is inevitable not to think of its unique

shape and particular taste. This brand had the amazing idea of producing a
triangular chocolate bar which includes milk chocolate, nougat, almonds and
honey, and wrapp it in a box with the same unique shape in order to make it
distinguishable from the rest of the chocolates. So we can conclude that
Toblerone managed to make their differentiation point, their competitive
advantage as well.

Comparison table main competitors

Company Brand Products* Time in mxn

market

Hersheys Kisses different packages: 51 years

special selection (cherry,
marble, caramel, lava cake,
moja), almond, giant kiss

Hersheys Bar different sizes: cookies n 51 years

cream, milk, dark, almond

Nestlé Carlos V different sizes: original, no 70 years

sugar, chocoleche, stick
white, mexican cacao,
 snack

Nestlé Crunch different sizes: stick, crisp, 1930

original, cookies n cream Nestlé arrives
in México

Mars Snickers different sizes: original, 27 years

white, almond, minis

Mars M&Ms different sizes: milk, 27 years

peanut, crisp

Kraft- Milka milk, oreo, hazelnut, cow 10 years

Mondelez spots, luflee

Kraft- Toblerone milk, dark 10 years

Mondelez

Ferrero Ferrero Rocher different packages: 1992

original, raffaello, rond Ferrero arrives
noir in México
*CHEDRAUI ONLINE

Value proposition
This statement is key because it describes the benefits that you as a brand offers to
your market segment. Is an easy-to-understand reason why a customer should buy a
product or service from that particular business.

- Hersheys Kisses: spread the bliss with a kiss, heartwarming the world
- Hersheys Bar: sharing is delicious
- Nestlé Carlos V: Unique and smooth, it is considered the reference of chocolate for
mexicans
- Nestlé Crunch: noisy crunchy milky bar with puffed rice
- Mars Snickers: being a hunger buster above and beyond a chocolate bar
- Mars M&M's: being able to eat the chocolate without making a mess, bite-size with a
colorful topping
- Kraft-Mondelez Milka: made with tender alpine milk
- Kraft-Mondelez Toblerone: unique Swiss chocolate peak form bar made with honey
and almond nougat
- Ferrero Rocher: premium, classy and elegant product with a unique taste experience
and packaging making it a great gift
Current positioning

- Hersheys Kisses: Product use/application.

Kisses understand that the consumers see
them mainly as a chocolate to gift on any
occasion; people buy kisses to express any
kind of feeling in any situation (to express
love, to be thankful or just make someone
happy); that's why they are available in any
store and they focus on attractive presentations.

- Hersheys Bar: product/price: Hersheys bar is a

normal chocolate bar; people see this
chocolate as an average bar, but with a nice
price/quality relation; they don't focus on the
presentation or any other attribute; Hershey's
focus on being anywhere in case you have a
craving and to also
being able to share a chocolate square to your
fellows.

- Nestlé Carlos V: product/price: Carlos V is a

chocolate bar which you can find anywhere.
They don't focus on the presentation because
they understand that people buy the bar
because of their traditional flavour with an
excellent price.

- Nestlé Crunch: Product attributes: Crunch has

always highlighted their main attribute: a
crunchy chocolate. Despite the fact that they
sell their products for a good price, their main
competitive advantage is that they sell crunchy
chocolate.
- Mars Snickers: product use/application: snickers
does not sell a chocolate, but a snack that totally
changes your mood and takes away your hunger
and cravings; their marketing focus on the fact
that their chocolate is different because people
can eat it to take away your hunger or to get
energy for a sport.

- Mars M&M's: Product attributes: M&M's is Not

only the chocolate that you can have as a snack,
but it's unusual circular presentation in small
portions makes it an easy chocolate to eat and
perfect for snacking.

- Kraft-Mondelez Milka: Product quality: Milka is a

high quality product; they are not on every single
store and their price is quite high because people
acknowledge it as a premium product that is
worth it.

- Kraft-MondelezToblerone: Product quality:

although they´re recognized for the strange
triangular shape, Toblerone is mostly known as a
high quality product; they are not on every single
store neither and their price is quite high because
people acknowledge it as a premium product that
is worth it too.

- Ferrero Rocher: Product quality: High class premium

product and luxurious packaging chocolate with a
quality taste of contrasting layers making the golden
wrapper a unique product perfect for gifts and
holidays.
 Positioning maps
To represent the perception that consumers have about Kisses in relation to the
competence, three perceptual maps were created based on the attributes that we found that
characterize the brand in comparison to similar chocolate brands’ attributes that are
positioned on the top of consumer’s minds.

For the position maps, we used the following variables that will be explained in more
detail below each map.
1. Price-Quality
2. Sales points-Different flavors/packaging available
3. Casual-Presentation

For this first map to measure price we used Superama’s website as our reference point.
On the other hand, for the quality axis we went through different websites to find out which
chocolates are found fine, well made and well ranked both by experts and consumers. Even
though all of the options are good chocolates there is still a difference between them
regarding what is considered as quality for chocolates. All the chocolates taken into
consideration for this comparison offer an acceptable price-quality relation according to their
specific characteristics, and that all are competitive. Talking specifically about Kisses we
clearly see that it has a good differentiation as its price is the lowest and the product quality is
great which reflects a beneficial price-quality relationship for the customer and the brand.

According to this online stores: Superama, Walmart, Chedraui, Fresko and Oxxo the
variables of sales points and flavors/packages available in its website were established in
this position map (Figure 1).
Kisses is the brand with more variety both, flavors and presentation as well as is easier to
find in any convenience store and supermarkets. Ferrero rocher is next because of the
the diversification of different packaging presentations.
On the other hand, Milka and Toblerone have at least 5 and 3 flavors respectively and they
are not available in convenience stores like the other chocolates located on the right side of
the map. Figure 1:
 On this third map we can verify that the chocolates categorized as fine chocolate and
the ones with more elaborated packages presentations have more demand on special
occasions such as valentines day, christmas, mothers day and birthdays*. On the other
hand, the chocolates with simple packages are consumed as a casual purchase and do not
present an important increase of sales at a particular moment of the year.
*The subcategory of fine chocolate is the one with the highest demand in February,
since last year it represented 16.7% of chocolate sales this month with a growth in
value of 6.9% and 11.2% in volume. Among the top best-selling fine chocolate
products are Ferrero Rocher, Hershey's Kisses, Ferrero Collection, Turin Chocolate
Fino, Ricolino Bon Bon. (Sánchez, S. Forbes, 2020)

Now turning to Kisses behavior, we can conclude that these chocolates are considered fine
and elegant chocolates, which are taken into account when consumers have a special
occasion to celebrate and they present an increase of sales on holidays.

Talking about prices and grammages of presentation, the price of the chocolates with
an elaborated package tend to be quite more expensive than the casual presentation ones,
regardless of the amount of chocolate in each presentation (Figure 2).
 Figure 2:

Future Value Propositions

Take into account that Kisses is a very well positioned brand nowadays thanks to its
excellent quality and strengths within the industry, we decided that not to change the value
proposition already given. This is because so far the proposal has served for Kisses to be
recognized as a brand where the main values that it wants to show is the importance of
relationships and sharing our things with our loved ones regardless of whether it is a
special occasion or a normal day.
● “Something for everyone” represents the message of how a small gift like a
chocolate can be something very representative and how this gift can be for
anyone
● “Spread the bliss with a kiss” represents how Kisses want to spread happiness
through its chocolate and how the brand is interested in ensuring that their
products are a way to give away good feelings.
● “Heartwarming the world” Kisses wants to make sure that when
customers receive a little box of chocolates they can experience the
feeling of being loved, important and wholesome, so that later they
want to share the same experience with another loved one and become
a chain of well-being.
 Communication strategy

Communication is the key to successfully reaching the target market of the brand
and transmitting its attributes in the most effective way. The value proposition will
maintain the same; however, the attributes of Kisses can be exploited in different
ways, since we identify that their main communication channels are social networks
and merchandising at points of sale during special dates. The message has to be clear
and the brand has to use the actual channels in a more clear and effective manner so
that our defined target market fully understands the value proposition in an organic
way. For this we have structured a communication strategy that will reinforce the
brand positioning along with meeting the brand objectives as creating consumer
loyalty.

The Ads:

https://www.youtube.com/watch?v=ifw-r-grD30

https://www.youtube.com/watch?v=hUslMB9KU-U

They currently do... Because they think/believe that...

People create sweet and emotional connection They have the idea that everyone should be able
moments for everyone through details that can to enjoy life’s goodness; therefore, Kisses can be
be simple but meaningful. the perfect sweet for every celebration or
special occasion.

If we get them to think/believe that... Then they will...

One-of-a-kind persons and moments are Position as the brand that is simple but
everywhere and Kisses will always be close for meaningful and found anywhere to bring love
consumers to share and make their loved ones and happiness to special people.
know that they are special.

Insight “We are always close.” “We are special.” “Sharing is caring.”
“There’s something for everyone.”

Attributes Easy to find, accessible, casual but special, can be shared,

variety.

Benefits Quality, great flavor, gift packaging

Reasons to believe Kisses are already positioned to be one of the top-of-minds

when people look for an accessible detail to give away on
 special occasions.

Objective Tone Message Strategy Media

Kisses “There’s always To reach the target - Package

Reinforce Kisses
communicate in something for market (Woman aged The traditional Kisses
attributes as well an effective way everyone. Spread 20-29, NSC C+ that package will have the
as the brand that normally what you feel lives in the city, phrase
preference, involves with a Kiss.” enjoys a good “Spread what you feel.
positioning and emotions such company and making Take one and give one
loyalty of as love and The message is memories), the away.”
happiness in intended to Through The Line This way, when people
consumers
order to imply that, as Strategy will be used are on any of the
during special connect that Kisses is easy to so that the message multiple points of sale,
days, but also, to emotions to find and at an catches the looking for a chocolate
maintain their Kisses’ products accessible price, customer's attention to give away or to eat,
sales through the and the positive a simple but through traditional they will wonder if
year by stimulus that meaningful detail (publicity) and there is someone who
results in the is always innovative channels they want to express
communicating
consumer’s available to share (mobile marketing) in their feelings to or just
to their target
mood when they and enlighten way that the make them happy.
market that share or receive everyone’s days. relationship and After looking at the
Kisses is close to Kisses. The tone loyalty between the price, they will buy
pampering their should be soft brand and its Kisses to share with
loved ones in and warm. consumers can be everyone; could be
their day-to-day strengthened. either a close person
or even a stranger.
lives.

- Social Media
The message “There’s
always something for
everyone. Spread what
you feel with a Kiss” will
be shared on social
media (Instagram,
Tiktok, Facebook)
through short videos
that show people
sharing their emotions
with Kisses in everyday
ways (home, school,
office, a meeting),
referring to the new
 message of the
package that invites
the consumers to
share details, moments
and happiness with
everyone.

Concluding, we already have seen that the chocolate industry is very competitive
and is led by huge companies with experience and value to offer. Hershey’s is one of
them, and as a consequence so is Kisses.

It is clear that the brand potential and success is based on the fact that is
characterized by sharing and showing love to the people you care about. Starting from
this and in addition to the price-quality relationship and the bite size characteristic, we
identified that Kisses must highlight more of these attributes through a solid and
complete communication strategy. This without sending other messages or messages
that can be misinterpreted so the consumer has a clear idea of what the brand wants
to transmit, that's why it's important to adapt company's processes to the main
industry trends that represent the changing needs of consumers.

With this analysis we got to understand the position of every direct competitor
that the brand has, which enriched our perspective and showed us that Kisses has well
identified attributes that form its differentiation and competitive advantage. Now we
understand the path that the brand should take considering keeping the actual value
proposition but increasing and clarifying the promotion. Finally, the benchmarking
process allowed us to analyze and find a way to implement strategies so that the brand
personality is stronger, well perceived and competes even more with the others in the
market.
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