Planters Nuts – Case Solution

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Planters Nuts Case Answers

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The issues of the Planters Nuts brand

The Planters Nuts brand is having three issues:

• Current positioning and target market are less relevant to its new products;
• “Leaky Bucket”: Planters became a new entrant in the Almonds and Pistachios market with less expertise than other major competitors (Blue Diamond and Wonderful). This results in a higher cost of goods sold, and the growth in these new areas is not enough to offset the decline in Peanuts’ sales growth;
• Since the company wanted to penetrate new markets, it had to increase marketing efforts & budget, thus lowering its margins.

Recommendation

The Planters Nuts brand should drop its efforts to penetrate new markets and re-focus its resources on the main product: peanuts.

5Cs implications

It is clear that by trying to penetrate new markets, the company is facing high threats from big players in the Almonds and Pistachios market while losing its Peanut market share to competitors like Emerald and Store brands. Planters Nuts used the same target market for Almonds, and Pistachios are considered inappropriate since Peanuts target men, and Almonds are preferred more by women.

Also, having to maintain the marketing budget for peanuts but also increase the budget for new markets shrinks profit margins. Moreover, Planters Nuts is risking diluting its iconic brand icon “Mr. Peanut” to introduce almonds and pistachios based on the fact that most customers perceive the brand as “less fit” for almonds and pistachios.

On the other hand, although it seems the peanut market is shrinking, Table 1 reveals that peanuts still hold the highest market share and penetration. Other surveys also show that customers still consider peanuts as utility players and primary nuts. This implies there is always an opportunity to grow peanut products.

Therefore, I recommend Planters Nuts quit the new markets and re-focus its resources on its core product, which is peanuts.

Target market and positioning

I suggest the following adjustment for Peanut’s target market and positioning:

Gender: Table 11b reveals that women consume more snacks and nuts than men. Although more men eat peanuts than women, the percentage of women who consume peanuts is still significantly high (44%). Therefore, targeting both men and women will help Planters capture a more significant market share.

Age: the age range should be adjusted to 45-65. This suggestion is based on Table 11a. Customers from this age range have a higher consumption rate index. A smaller age range will help Planters Nuts to be more effective in focusing its marketing efforts.

Marketing mix

Product

Peanut right now is trapped between less healthy than almond and less tasty than cashew. The following strategies will address this problem:

New flavored peanuts: new flavors will be the critical differentiation for Planters Nuts to stand out from Emerald and the store’s brand. Also, the flavors will lower the “less taste than cashew” threat and attract more customers since they usually want to “eat more nuts and types.” “New peanuts” will be appealing to these customers. Also, the flavored peanuts will help change customer perception about “basic nut,” which in turn can justify the price.

• Smoked: based on almond reference, although almond is less tasty than other nuts, customers still like smoked almonds. Therefore, I believe that smoked peanuts will be appealing to customers;
• Other flavors: ranging from typical flavors to new ones to attract more customers who are curious to try new types of peanuts;

Packaging: highlight healthy facts about peanuts to educate customers that peanuts can be as healthy as almonds but cheaper and tastier.

Price

The Planters Nuts brand is considered “Costly,” especially when its main product, Peanut, is usually perceived as “cheap and basic” by customers. Therefore, I suggest the following pricing strategy:

• For basic peanuts: lower the price to become competitive with peanuts from Store brands and Emerald;
• For flavored peanuts, the price should be the same or a bit higher than basic peanuts to justify the flavors;
• Offer discounts/sales so that the products can be more appealing to customers, who are usually price-sensitive in this market.

Place

Since customers usually “grab-and-go” and move quickly through the aisle, the products should be…