Analysis And Examination Of The Case Study Of Planter Nuts Essay.

5C's Framework to Diagnose the Problem as to Why Planters Nuts’ Performance has been Struggling

Discuss about the Theoretical and Empirical Analyses.

The present report aims to provide an analysis and examination of the case study of ‘Planter Nuts’ for identifying the reason of its declining performance in recent times. In this context, the report emphasises on diagnosing the problem faced by Planter Nuts through the application of 5C’s framework and analyse consumer behaviour in snack nut category. Also, it evaluates marketing research carried out Kraft Foods Group in respect to Planter Nuts and segmenting, targeting and position strategy of Planters. The company is also provided recommendation for its brand positioning strategy in the report.

5Cs Framework to Diagnose the Problem as to Why Planters Nuts’ Performance has been Struggling

As depicted in the case study, the consumption of Snack nuts of Planter’s brand is declining among the US consumers. 5C’s framework is a situational analysis technique that helps in examining of internal and external environmental factors to provide a better understanding of a marketing problem in context (Chernev and Alexander, 2014). The reason for the decline in performance of Planter Nuts can be evaluated successfully through the application of 5C’s framework consisting of the following components:

Customer: This helps in gaining an understanding of the needs and expectations of the customers. Planter Nuts, a brand of Kraft’s Foods Group, aspired to become the ‘national nut’ by providing consumers high quality products at minimum cost. Planters initially emphasised on providing peanuts to the US consumers but later expanded its product line to include cashews and mixed nuts. However, later the company also included almonds and pistachios in its product line with increased demands of these nut types by US consumers due to their health benefits. The expansion of the product line of Planters caused a decline in the sales of its core product areas that are, peanuts, cashews and mixed nuts. This was mainly due to increase in the competition in the snack nut market of the US from the brands such as Blue Diamond, Wonderful, and Emerald. The case study analysis depicts that competitive brands offer products to the customers at relative lower prices than Planter (Dolan and Ngwe, 2016). Also, the shift of consumers towards more healthy nuts such as almond and pistachios were responsible for the decline in sales of the company’s core products (Consumers Go Nuts for Healthy Snacks, 2015). 

Company: This analysis is carried out for gaining a proper understanding of the company’s position for meeting the customer needs. This can be evaluated through analysing Planter strengths and weakness through ‘SWOT’ analysis:

Strengths:

• Good brand image among the US customers (Dolan and Ngwe, 2016).
• Providing high quality and tasteful nuts in the snack nut category (Dolan and Ngwe, 2016)

Weakness:

• Targeting only one market segment of males aged between 35-65 years (Dolan and Ngwe, 2016).
• Recognised among the US consumers as only offering high quality peanuts, cashews and mixed nuts and does not gain customer recognition in healthy nuts category such as almond and pistachios (Dolan and Ngwe, 2016).

Opportunities:

• Expanding the product line for increased offering of high quality almonds and pistachios nuts to the customers (Dolan and Ngwe, 2016).

Threats:

• High cost of nuts as compared to the competitive brands such as Emerald (Dolan and Ngwe, 2016)

Competition: Planter Nuts is facing stiff competition from Blue Diamonds, Wonderful and Emerald. Blue diamonds has achieved a good brand name in providing almond nut to the customers. On the other hand, Wonderful is a dominant player in offering pistachios nut among the US market segment. The increasing shift of US consumers towards almonds and pistachios due to their health benefits is impacting the sales of planter’s peanuts (Watson, 2014). Almonds are recognised as healthy for heart by the American Herat Association. In addition to this, brands such as Emerald offers relatively low priced peanuts in comparison to planters as depicted by the case study further negatively impacting Planter sales and profits (Dolan and Ngwe, 2016).

Analysis of Consumer Behaviour in the Snack Nut Category

Collaborators: Planter nuts need to implement major changes in its operational activities such as procurement and manufacturing for meeting the customer needs. It needs to reduce its operational cost by offering low price products for achieving a competitive advantage. Also, the company need to increase its suppliers providing almonds and pistachios nuts for meeting changing customer needs (Dolan and Ngwe, 2016)..

Context: The nut consumption trends on the basis of demographics reveal that there is increased consumption of snack nuts by males in comparison to females. However, Planter nuts current positioning strategy only target male segment aged between 35-65 years. Also, the nut consumption is more in population group above the age of 65 years. The demographic trends as illustrated by the case study indicate that planters need to modify its current positioning strategy for improving its performance (Dolan and Ngwe, 2016).

The case study demonstrates the changing trend and preferences of the US population group towards the consumption of snack nuts. The increased popularity of the nuts is on account of high protein and energy nutrition provided by the snack nuts responsible for their large volume sales in the country (International Markets Bureau, 2011). However, there has been dramatic change in consumer behaviour towards snack nut category in recent times. Earlier, the US population group regarded peanuts as basic nut and flavoured peanuts become more popular among the country’s population group. Planter’s peanuts sales recorded high sales during this time and its salty peanuts were in high demands among the US consumers (Schultz, 2014).

The expansion in product line of Planters nuts for cashews and mixed nuts drive the attention of customers towards them and cashews are regarded as the most delicious nut among the US consumers. The market entry of Blue Diamond and Wonderful brand in the snack nut market of the US brought major changes in the taste and preferences of the consumers. The introduction of almonds and pistachios brought attention of the consumers towards eating nutritious and healthy snack nuts. Almonds were regarded as healthy for heart by American Heart Association and this cause a rise in the demand of these nuts among the consumers in the country (Dolan and Ngwe, 2016). Peanuts, cashews and mixed nuts were relatively perceived as high in fats by the consumers and thus less healthy (Consumers Go Nuts for Healthy Snacks, 2015). In this context, the theory of reasoned action used for analysing consumer behaviour trends states that specificity is a critical factor in the decision-making process of a consumer. The expectation of achieving a specific result from an action taken influences the purchasing behaviour of consumers. Thus, the perception of gaining a specific advantage with purchasing a product plays a major role in decision-making process of consumers (Southey, 2011).

Source: Southey, G. 2011. The Theories of Reasoned Action and Planned Behaviour Applied to Business Decisions: A Selective Annotated Bibliography. Journal of New Business Ideas & Trends 9(1), pp. 43-50.

The change in consumer behaviour regarding the consumption of snack nuts can be mainly attributed due to their changed perception eating fat free and nutritious nuts such as almond for staying healthy. The increased awareness among the US consumers about the benefits of eating healthy snacks is causing the changes in their buying patterns in snack nut category (Sweeney, 2000). The figure below reflects percentage of peanut consumption in the US:

Evaluation of Marketing Research Undertaken by the Kraft Foods Group in Respect to Planters Nuts

Planters Nuts is a part of Kraft Foods but the entity has recently divided into two parts, Mondelez and Kraft Foods Group. Kraft Foods Group is involved in grocery business in North America and Planters has been a part of it since the split. Kraft Foods has assigned a new management team for identifying the main issues responsible for the declining sales of the Planters (Ahead of Spin-Off, Kraft Goes Nuts to Support Grocery Business, 2012). The marketing team under the new management has undertaken a research for gaining a better understanding of the current situation of the company through gathering market data.  The research undertaken involved both qualitative and quantitative survey for achieving a specific answer for the research problem. The quantitative surveys undertaken by Krafts Food Group provided an insight into the consumer perceptions of snack nuts on the basis of health benefits and costs. The quantitative data also reflects the brand awareness of Planters among the US consumers and assessed its brand equity in terms of quality, popularity, familiarity, uniqueness and relevance. The result obtained through quantitative survey concluded Planter a recognised and established brand among the US consumers in snack nuts category (Dolan and Ngwe, 2016).

In addition to this, qualitative research such as in-depth interview and focus groups surveys was also undertaken by Kraft Foods Group. The in-depth interview carried out among the consumers depicted that Planters was mainly recognised as providing quality products for peanuts, cashews and mixed nuts. It has still not achieved brand recognition in category of growth products that are, almonds and pistachios. Almonds and pistachios are regarded as healthy nuts by American consumers and other products such as cashews and peanuts are associated with high fat content (Dolan and Ngwe, 2016). There is dramatic shift in the customer preferences towards healthy nuts in comparison to that of flavoured nuts such as salty peanuts, a core product of Planters. Also, the core products of Planters were attributed by customers to be high in cost as compared to similar products offered by competitive brand such as Emerald. The current marketing strategy of Planters can be regarded as ineffective as customers perceive the company’s products out-dated. The current positioning strategy of Planters was mainly developed on the basis of demographic variables. The company mainly targets male customers of age group 35-65 years. However, case study analysis shows that nut consumption is more in the adult population of above the age group of 65 years in the US. Moreover, female population group in the country consumes more nuts as compared to that of male population (Dolan and Ngwe, 2016).

In this context, cognitive learning theory can prove to be very useful in analysing and examining the information collected through market research by Kraft Foods Group in relation to Planters declining performance. As per cognitive learning theory, consumer’s behaviour towards purchasing a specific product or service is mainly influenced by their thought process. The thought process of consumers is mainly influenced by their present and past experiences achieved through the consumption of a specific product or service over time. Consumer leaning in accordance with cognitive theory can be described as acquiring information and experience about a product or service in past period of time tend to have a significant impact on their future buying behaviour (Awa, 2010).

As per the theory, the main influential factors in the purchasing decision-making process of consumers for snack nuts products of Planters are personal, product and situational factors. Product factors relate to self-image of products, product factors involve perceived health risk in purchasing the products and situational factors relates to purchasing products for personal use or for serving to guests in parties etc. in snack nut product category of the company (Salted and Roasted Nuts and Seeds, 2016).  Thus, qualitative and quantitative information obtained through market research can be interpreted easily trough Kraft Foods group by applying cognitive theory.  Consumers still perceive Planter nuts core products as similar to peanuts on the basis of their past experiences that is negatively impacting their future buying behaviour of company’s products. Thus, the marketing research undertaken by Kraft Food Group illustrates modification in the marketing strategy of Planters nuts so that customers do not perceive the company’s brand as synonymous to peanuts only.

Segmenting, Targeting and Positioning (STP) is a strategic approach used by marketers to identify the target customer segments and planning the strategies to gain customer recognition in target customer segments . The current STP strategy used by Planters nuts is evaluated as follows:

• Segmentation: The segmentation strategy followed by Planters nuts is to focus only on one target market and developing effective strategies for becoming a dominant player in the identified market segment. As evident from the market research carried out by Kraft Foods Group in respect to Planters, snack nut consumption is variable in different market segments and so company must design its segmentation strategy for reaching out to different market segments instead of emphasising only on one market segment (Dolan and Ngwe, 2016).
• Targeting: The target segments as identified by the Planters nuts is mainly of male population group in the US aged between 35-65 years. However, as illustrated by the market research data, the consumption of snack nuts is relatively higher in female population group of the US. Also, adult population of above age 65 years consumes snack nuts more in comparison to the youth population in the country (Dolan and Ngwe, 2016). This indicates that the company need to re-evaluate its targeting strategy and identify new target segments in the country for improving its sales and profitability.
• Positioning: Planter nuts emphasises on positioning its products in snack nut category in men’s target segment through the help of spreading marketing messages on packaging of its products, displaying ads in magazines and launching campaigns targeting at male population group to provide them information of nutritional benefits of its products (Dolan and Ngwe, 2016). The marketing research data indicates that the company need to modify its positioning strategy in accordance with the new target segments identified.

Planter nuts need to adopt major strategic changes in its positioning strategy for increasing its sales and profitability (Watrous, 2015). As illustrated by the market research conducted by Kraft Foods Group, the company need to identify new market segment of adult and female population group in the US as the consumption of products in snack nut category is relatively more in these segments as compared to male population group. The company need to position itself in the snack nut market as such it is not only viewed as peanuts provider but also a major player in the healthy nuts category such as almond and pistachios. This can be done through the help of adopting proper communication channels that facilitates the company to reach to its target customer segments. Implementation of proper communication channels is also essential so that customer’s views company’s brand image not only as limited to peanuts but also fit for almonds and pistachios products. Communication channels such as advertising, press releases, launching health campaigns, social networking will help the company to re-position its brand image in the market (Ries, 2003). The company can modify its ‘tag line’ to shift its target segments from male population group to female and adult population group (More than Peanuts: Snack Nut Brands Up Spend On Sponsorship, 2009). The change of consumer behaviour pattern for eating more healthy nuts such as almond and pistachios is responsible for Planters to adopt major change in its positioning strategy to enhance the sales in healthy nuts category (Topper, 2014). The competitive brands such as Blue Diamond and Wonderful receives huge support from American Health Association that has enhanced their brand reputation in mind of the US consumers as depicted from the case study analysis (Dolan and Ngwe, 2016).  Thus, to enhance the brand image of Planters it also needs to obtain certification of its almonds and pistachios products from health communities in the US to gain customer recognition in these product segments.

Conclusion

Thus, it can be stated from the case study analysis that Planter nuts need to modify its marketing strategy for enhancing its sales and profitability. The main reasons responsible for the present declining sales of the company is changes in the consumer behaviour in snack nut category and perceived past brand image of Planters in the mind of consumers. Thus, Planters need to position its new brand image among target segments identified for overcoming the decline in the sales of its products in snack nut category.

References

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