Joban Sandhu’s blog post, Poor Positioning: The Reason Hershey’s Spread Failed, states that when Hershey came out with a chocolate spread similar to Nutella it failed in the market due to poor positioning. Positioning describes the product in the mind of the consumer.
Joban’s argument is true; Hershey’s chocolate spread failed because Nutella was already positioned as the leader in the market. For all we know, Hershey’s chocolate spread could have been a superior spread, in taste or ingredients or some other measure, but because Nutella was already positioned as the leader in the market, consumers believed that Nutella was the best spread. The reason Nutella is the leader in the market, considered to be the best, is not necessarily because their product is actually better, but because they were the first firm in the market.
Being the first firm in a market is one of the most effective ways to be the leader in a market. That is why Joban suggested instead of trying to compete with Nutella, Hershey should enter a new market to have success. It is almost impossible to overtake the leader of a market, instead to maximize success as a follower a firm should relate their product to that of the leading firm.