Hbr Planters Nuts Case Study
Essay Preview: Hbr Planters Nuts Case Study
Report this essay
Is it possible to stay relevant, competitive and ever-present in the minds of today’s consumers if you are a century-old peanut company? That is the question facing Planters Nuts, an American snack food company, founded in 1906, best known for its variety of processed nuts and for Mr Peanut, the company mascot and icon. By 2012, sales numbers had dropped 23% from the last six years and household penetration for Planters had dipped from 46% to 38%. For a long time, Planters rarely tried to reinvent the wheel. They stuck to their targeted segment of 35 to 65 year old males who were looking to lead a healthier lifestyle. At the same time, marketing was based on a bottom-up instead of a top-down strategy. Planters were favouring profitability over looking at strategic fit and they had failed to sufficiently analyze the market and consumers’ tastes and expectations, to identify the strengths, weaknesses, opportunities and threats of their peanut empire. While Planters kept up with growing consumer trends and sold good volumes of the latest “trendy” nut types such as, almonds and pistachios, they took their eye off lagging sales in the traditional nut areas. Additionally, they were also threatened by marketing competitors who had invested quite a lot of money into unique and novel forms of marketing. Results showed that in 2012, generic store brand nuts were the winner, holding onto 31.6% of dollar market share. Planters Nuts came in second with 24.5%, with Wonderful at 11.9% in third and Blue Diamond trailing behind at 6.3%. The consumers had spoken. In spite of the millions of dollars pumped into marketing and media advertising by both Blue Diamond and Wonderful, most consumers felt that generic store brands were “just as good” as these branded products. If it came down to a battle of taste, store brand nuts were just as good and probably offered at a lower price, therefore consumers would not hesitate to purchase them.The Blue Diamond cooperative was created in 1910 by the almond growers of America. Blue Diamond’s strategy was to offer a broad range of almond products, segment the market and then target each segment (i.e. “the active, health-conscious male consumers” and “the active, but calorie-conscious female consumers). Approximately $15 million of spending was set aside by the Almond Board of California on Blue Diamond marketing. On the other hand, Wonderful Pistachios chose to market in a different way. With $15 million spent on a fall marketing campaign in 2009, Wonderful pushed forth a media-based campaign titled, “Get Crackin’“, the premise of which involved – one could argue, slightly infamous – celebrities, trying to break open a pistachio nut in their own unique way. On top of that, there was an additional annual $9 million of marketing spending by the American Pistachio Growers which focused on the health benefits of the pistachio nuts. However, Wonderful was still a relatively new player in the market scene, having only been established in 2007.
Despite sales of Planters products failing to rebound in 2012, market studies on brand health and strength showed that Planters was leading its competitor when it came to consumers’ familiarity with the Planters brand. The Mr Peanut icon was instantly recognizable with more than 96% of Americans being able to identify him. Having been around for a century, the Planters name evoked feelings of nostalgia. Planters have had a long history in the peanut market and were known as an established and respected brand. Those qualities enabled them take advantage of nostalgic values, with their chosen consumers more likely to purchase the same brand products that their parents would have, or that they would have consumed themselves when they were younger. Planters’ strength and assets were that it was “an established, respected brand and that the cumulative effect of historical marketing, spending and message communication was strong”. Most of its competitors simply didn’t have the brand equity that Planters did. While the brand and icon were recognizable, they were also seen as being old and outdated. The old-timey gentleman look of Mr Peanut, with his top hat, monocle and cane, might as well have belonged to a bygone era. Planters picked up on this and moved to modernize its Mr Peanut icon; he was now talking, walking, and hosting dinner parties in a series of stop motion ads, which tied in with the launch of a new range of Planters nuts during the holiday season, where consumers were historically more likely to spend money.