The latest example is Hershey Co., which will debut a Reese's Elvis Peanut Butter Banana Limited Edition offering in June, with a PR blitz in July, Richard H. Lenny, chairman, president and CEO of the company, said during yesterday's press conference on the company's first quarter 2007 results.
The product lineup will include standard, miniature and -- you guessed it - king-size sizes. Based on retail pre-order requests, the highest in Hershey's history, the company expects merchandising units to be more than twice the typical average and expects sales to be close to 20% greater than all of its 2006 limited editions, yet with 80% fewer items, Lenny reported.
"Elvis will accelerate Hershey's industry-leading, king-size business, which is up 11% year to date, almost double the performance for the category," he added.
Lenny also revealed that Hershey will further capitalize on the Reese's franchise, one of its most successful, but introducing Reese's Whips, a peanut butter/chocolate product with a "light and fluffy texture" and 40% less fat, in this year's fourth quarter.
Those introductions are two of many in Hershey's aggressive new strategy to staunch market share decline and trounce its competitors.
After a grueling 2006, including a fourth quarter that saw Hershey's U.S. market share drop from 43.5% to 42.5% in the 13 weeks ending Dec. 24 - as arch-competitor Mars' share climbed from 24.2% to 25.9% -- Hershey this year implemented a new corporate strategy focused on revitalizing its core products, introducing new products (especially in the lucrative premium and "refreshment" sectors), and branching into strategic international markets. (Operational cost reductions are also a big focus).
A critical element is heavily increased advertising, promotion and in-store support expenditures.
First-quarter results, which were essentially in line with Hershey's expectations, seemed to largely support the wisdom of these moves. Net sales increased 1.2%, even as total costs/expenses rose by 6%, reflecting both a overhauling of Hershey's global supply chain and costs associated with the process of laying off 1,500 employees over the next three years.
Net income declined from $122.5 billion to $93.5 billion, hurt largely by softness in single-server sales. Diluted earnings saw 1.2% growth. Hershey confirmed that it continues to be committed to targets of 3 - 4% net sales growth and a 7- 9% increase in diluted earnings for this year.
Other product and marketing highlights: