Discuss about the Marketing Strategy Plans and Goals.
Marketing strategy is all the plans and goals put together by an organization to create a demand in the market for its product. This strategy consists of analyzing various factors and understanding them to achieve the desired result which is success of product in the market (Beckwith, 1997).
In this case study, Planters Nuts’ case has been presented, where their marketing strategies undertaken have been analyzed and positioning and targeting techniques have been suggested.
Apply the 5Cs framework to diagnose the problem as to why Planters Nuts’ performance has been struggling.
It is analysis of five key areas for the marketing decision undertaken by a company (Chernev, 2014).
Customer- determining the needs of the customers that have to be satisfied by doing extensive market research based in that segment , purchase pattern, quantity and frequency. Planters Nut’s identified their target market, males in the age group of 35-65 years, aspiring for a healthy lifestyle. They analysed that the customers need healthy, low in fat and inexpensive snack (Dolan and Ngwe, 2016). The nut sales were affected when the customers shifted to better in taste and healthy almonds and pistachios, which were also marginally expensive than nuts. Planters Nuts’ did not focus on adopting more than one target.
Company- After analysing the needs of the customer it becomes essential for the company to realise their potential to meet those demands. Strength, weakness, opportunities and threat should be analysed to improvise (Siebert, 2014). There was an opportunity for the company to succeed in the nuts as well as almonds and pistachios market. Strength of the brand name, Mr. Peanut that has already built in the market company should have capitalized on it and then should have focused on both the targets. The weakness of the company was that as they focused on the new target, the sales of their prominent product declined (Dolan and Ngwe, 2016).
Competition – It is essential to identify your competition in the market. Analysis of the competitors’ product and their strengths and weakness will help in bring necessary changes in the marketing strategies and product development (The Chartered Institute of Management Accountants, 2007). Planters Nuts’ focus was not only in one category of the segment, and they were competing with Blue Diamond Almonds and Wonderful Pistachios who were only focusing in one category and spent heavily on their promotions. Planters Nuts’ wanted to improve their margins, and could not spend heavily on promoting each product in the same segment. The sale of nuts category declined faster than the sale of almonds and pistachios increased because customers shifted to Blue Diamond Almonds and Wonderful Almonds because of more consumer awareness built by them.
Collaborators – The end result is to make product easily available to the customers. This could be done by teaming up with partners who help make this job easier. Planters Nuts’ collaborated with large retail grocers and mass merchants but they were also disappointed with the unsatisfactory sales revenue, this was largely because of less branding activities undertaken by the company. Gradually the retailers started focusing on their store brands.
Context-Any limitations in the development due to political, economical, social or technological should be thoroughly analysed. Peanut was a legume and rotational crop, whereas almonds and pistachios were not rotational crops. This should have given added advantage to Planters Nuts’ since they were dealing in both. The company did not use this to the advantage.
Consumer behavior – It is to understand the needs and wants of a consumer. Consumer behaviour includes the buying tendency, purchase pattern, buying factors, trends, taste and preference. It becomes essential for a company to understand consumer behaviour to deliver the required product in the market at the right time. An organization has to study consumer behaviour in order for it product to generate expected return. They have to identify the buying factors in order to satisfy the needs of the consumer (Wright, 2006).
In the year 2005, Peanuts dominated the snack nut industry. 50% of the U.S. households bought peanuts and 30% was the market share of all nut suppliers. This was followed by cashew at 33% household penetration and 21% market share. Household penetration for almonds and pistachios were 11% and 12 %, and market share were 8% and 7% respectively.
In the year 2012, household penetration for peanuts was 43%, cashew at 24%, almonds and pistachios at 23% and 24% each. Total market share for all nut suppliers fell for peanuts to 19%, cashew to 13% but rose for almonds and pistachios to 16% and 15% each.
Consumers’ perception is to eat healthy, low-fat snack which is inexpensive and better than other snacks. Peanuts excel in the category of being inexpensive but when it is about healthy, low fat and better than other snack, almonds and pistachios have an edge.
Most consumers feel that nuts are outdated and basic and they are not as upscale as cashew and pistachios.
There has been a shift in consumer preference from peanuts to pistachios and almonds because consumers are willing to spend slightly more on the snacks which healthier and tasteful. On the other hand some have the tendency to go generic and buy simply the cheaper product available. The buying behaviour of most consumers is to look for easy aisle shopping experience.
The purchase intent of consumer is also based on believability. Consumer gets influenced by the marketing strategies adopted to promote a product. If they believe in the claims made by the company, and the promotional campaign is attractive, the product will relatively be sold better and faster.
Consumption of nuts is relatively more in the higher age group of 65+, age group of 45-64 has moderate consumption rate, amongst 25-44 it is average but it is below average in the age group of 18-24.
Nuts are losing their market to almonds, pistachios and cashew because they are more delightful for the customers, and they also believe that they are a healthier choice (Dolan and Ngwe, 2016).
Marketing Research- In order to understand the consumer behavior an organization put its resources to use and undertakes activities and develops strategies to identify key factors that sell its product in the market. Marketing research is an activity conducted to understand the market so that the resources of the organization are not wasted in creating a product which has no demand. In the first stage strategies are developed to know the consumer behavior, check the awareness about the brand in the market, and its positioning and then the factors that impact the buying decisions. In the second stage strategies are developed to increase customer interaction, raise brand equity in the market and also tools are developed that will help in increasing the market share of the product. Collaborates and channels are also important in marketing research because they are the link with the customers, their analysis is also an integral part of this research (Kolb, 2008).
Kraft Foods Group designed a positioning statement for planters. The first step was to identify target customers, their buying behavior and frequency. Next were brand benefits and brand personality and what made Planters different from its competitors.
The major change was adopted in marketing when the group decided to release a 30 second video featuring voice of a renowned actor. This was the first time when Mr. Peanut, a well known character to the Americans had voice. This made its way from natural to a more direct appeal in the minds of the target audience. Next advancement was to associate NUTrition line with Men’s Health magazine. This created a more prominent impact in the minds of the target customers (Dolan and Ngwe, 2016).
Consumers tend to buy healthy, low-in fat, better than other snack but it should be inexpensive. They believed that peanut only fell in the latter category, whereas almonds and pistachios fall in all former categories but are expensive as compared to peanuts.
Next was analysis of nutrient content in almonds, pistachios, cashews and peanuts, which stated that they are healthy and have all the nutritional properties.
To check the market awareness about Planters against its competitors amongst the consumers data were collect and analyzed. The results showed that Planters were the most popular brand in the segment. It was the first brand that came into the minds of the consumer when they thought of nuts and familiarity with the brand.
Study was conducted to understand the market strength of the Planters Brand. It scored exceptionally well in terms of factors like Popularity, Quality, Relevance and Uniqueness. On the fifth factor of familiarity it scored well. The analysis was concluded that Planters was a well known brand in the market and had the capacity to pull back its lost customers if the strategies are rightly adopted.
In depth interviews and focus groups were surveyed where sentimental connection and all the aspects of purchasing the brand were concerned.
Even after directly appealing the customers and being a well-known brand in the segment, sales revenue of Planters could not be revived. The product was not able to capture a larger part of market share after spending almost equivalent to its competitors on promotional strategies. One of the major reasons for the same could be that consumers have irrational buying behavior and even after the thorough study the company fails to understand the buying trends.
Evaluate Planters Nuts’ current segmentation, targeting and positioning. Justify the brand positioning that you would recommend for Planters Nuts going forward.
Market Segmentation- After analyzing the needs and demands of the customer, selecting the customer who would want the product and segregating them from the rest is called segmentation. Strategies are planned according to the customers that fall in the segment that the company wants to cater. Market is segmented on several bases, on variables like age, gender, income, family size, race, religion, nationality then it is called as demographic segmentation. Behavioral segmentation is when behavior, usage and buying pattern are considered. When it is based on the boundaries and geography it is termed as geographic segmentation. When lifestyle, activities, and interest determine the purchase decision then it is referred to as psychographic segmentation (Larsen, 2010). Planters Nuts’ current market segmentation could be termed as psychographic and demographic, because they have segmented the customers who are males in the age group of 35-65 and aspire for a healthy lifestyle.
Targeting and positioning- selecting the target customers of the segment is called targeting. Making the targeted customers own the brand that company produces is called positioning. The brand should leave an impact in the minds of the consumer; it should have a sustainable portion in the minds of the consumer. The loyalty of the customer with the brand is because of the positioning strategies undertaken to place the product in the minds of the consumer, which compels them to repeatedly buy the particular brand (Tanner and Raymond, 2012). Planters Nuts’ targeting and positioning strategy was to create Mr Peanut, a character that tells that the nut is a healthy choice of snack. They positioned themselves as the healthiest snack available for males in the age group of 35-65, who aspire for a healthy lifestyle and which was also inexpensive. They believed in owning one segment of the market and the results of the research showed that people related nuts with Planters.
Brand positioning is strengthening the brand name in the minds of the consumer (Ries and Trout, 2008). A strategy that Planters has already followed is to identify their market strength and direct competition. They understood the ways Blue Diamonds Almonds and Wonderful Pistachios positioned themselves in the market. Their strategy to position by creating Mr. Peanuts has worked over a long period of time, but due to change in consumer perception and behavior, they should reposition Planters Nuts’ as a brand which people could still relate to. Each generation has a different perspective and to dominate the market in the targeted segment Planters should broaden their scope. Focusing only on one segment would mean that the competitors who have focused production would continue to rise and Planters would face problems in the segments they cater to.
Customer changes its buying behavior and to sustain in the market and capture a large part of it Planter should modernize their approach, instead of competing for the shelf space at brand stores, planters should consider changing the packaging and term it as “Now a Quicker Snack” which is available at gas stations, vending machines, gyms. Also connecting with the target audience through their emotional sides would also play a major role, portraying Mr. Peanuts’ son, Peanut Jr. who has been a fat kid but due to right choice of snack he was able to control his weight. These positioning strategies would help Planters Nuts’ going forward and retain their brand name and capture the larger part of market share.
References
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Dolan, R.J., and Ngwe, D. (2016). Planters Nuts’. Harvard Business School [Online] Available from: file:///C:/Users/Abasus%20Solutions/Downloads/942007_202428731_planetsnut%20(2).pdf [Accessed 07 Sep. 2016].
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