CHICAGO: Iconic US chocolate maker Hershey has pledged to up its marketing budget by 20% in each of the next two years, as it battles to maintain its market position in the face of the Mars/Wrigley Company mega-merger.
The company is responding to long-standing criticism that is has failed to back its key brands and says it will concentrate the increased advertising dollars on its Reese's, Hershey's Kisses, Kit-Kat, Twizzlers and York core products.
Ceo David West told investors that marketing spend would rise 20% to between $155 million (€110m; £79m) and $160m this year, and promised a "20% plus" rise in 2009.
The figure signals a 55% compound growth rate over 2006, during which time, West admitted, mistakes were made in focusing on cookies and new brands.
He said: "It has been a difficult couple of years here with the market-share losses. We can see the light at the end of the tunnel in terms of stopping the erosion. Our goal is to stop the erosion, and we'll do what we need to do."
The company has been the subject of much merger and acquisition rumor recently, its name linked with UK-headquartered giant Cadbury. It has said for some time that it must expand its international sales, which currently account for just 14% of the total.
Data sourced from AdAge.com; additional content by WARC staff