Marketing Peter Pan Peanut Butter to Canadian Markets Essay
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Many U.S. consumers are not aware that there are many products that are sold in our country but are not available to countries like China or Japan. A lot of products are only for sale in the U.S. and consumers in other countries have to find other ways of obtaining those products. Some products that use to be sold in Canada have now vanished while others have never been available for purchase so many consumers have to order those products online, if possible, or possibly get some family member or friend from the U.
S. to buy and ship the product to them. Some Canadians are now surprised to learn that Coca-Cola Vanilla, or Vanilla Coke, is no longer available to purchase in the supermarkets and convenience stores located in Canada. Consumers on both sides of the border and other countries responded well to these products that were launched in 2002 by the Coca Cola Company. Canadians that now want this product will have to stock up the next time they visit the U.
S. Meanwhile they may be able to look forward to other products that may reach Canadian markets.
As Marketing Manager of ConAgra Food’s, Peter Pan Peanut Butter, I would like to market this brand available to Canadian markets by using a marketing plan that is the core of the business. The main reason for the marketing plan is that it provides a structured approach that forces the marketing manager to consider all the relevant elements of the planning process which might be missed if a more rushed approach is adopted especially when trying to market a product to foreign markets. Peter Pan Peanut Butter is brand of ConAgra Foods and was named after the J.M. Barrie character debuted in 1928. The brand was originally produced by the Swift & Company that at the time first called the peanut butter, “E.K. Pond.” Peter Pan PB comes in 10 different varieties which include Creamy, Whipped, Crunchy, Extra Crunchy, Honey Roasted Creamy, Honey Roasted Crunchy, Smart Choice Creamy, Smart Choice Crunchy, Plus 8 (vitamin enriched).
Peter Pan has been on the market for many decades and when first packaged, was marketed in a tin can. But because of metal shortages during the second World War, changed its packaging to glass and plastic jars. The product’s tagline of not sticking to the roof of your mouth is one of the reasons, other than it being just plain good, that the Canadians desire Peter Pan so much. The first step in marketing this product to one of the largest Canadian food markets such as The Superstore, Sobeys, Metro, and Safeway, is to analyze the customer value equation. “Traditionally we think that consumers choose based on the quality of the product, while really the driver of all choice is the non-cognitive relationship that the consumer has with the brand, which is entirely channeled through the brand identity.” (Wegrzyn, 2011).
The matter of finding a role of the brand within a consumer’s life comes after the brand identity has accurately addressed how the brand wants to be perceived. The question for prospective buyers in most situations is not whether to make a purchase in the product category, but which product or service to buy. When a product’s price exceeds its value-in-use, the offering’s net contribution, and inducement to purchase, is negative. The customer is better off not buying the product. Whatever the customer would gain from the product itself is more than offset by what she would have to give up in paying its price. In most situations, however, a very different situation exists. In most situations, the prices charged for products and services fall far below the values-in-use that customers expect to obtain from them. In many cases, because of competition, products’ use values are in multiples of 5 to 10 times the prices at which they sell. Customers buy products to fill unmet needs and because they expect to derive some value or utility from them. Products provide customers with four types of utility or benefit.
These utilities and benefits are time utility, place utility, ownership utility and form utility. What is the time utility or value to the consumer of having Peter Pan Peanut Butter available at any convenient time within supermarkets? The time utility may be of critical importance because many families may depend upon this product to satisfy the needs of small children which may take this product to school for lunch, possibly. So it may be detrimental that it is always available on the shelves by making sure that the production of the product is timely. Secondly, place utility is important. This is the value to a consumer of having the product available in convenient market locations. It may be important that the peanut butter is available at many different supermarkets especially those that are located near schools where there is a high population of children that the product would be in demand to. Ownership utility may not be an important factor for this product as is the value of transferring the product’s ownership.
Last is the form utility of the product. Form utility is the value to consumers from changing the composition of the product. The form utility of the peanut butter is also fairly high. Peanut butter isn’t just for peanut butter and jelly sandwiches, but is also used in Peanut butter chili, peanut butter broccoli, peanut butter ice cream and peanut butter cocktails. It can be eaten with chocolate, it can be eaten with jam, it can be smeared on chicken, and it can even be used in drinks and it seems that the uses for peanut butter are endless. Peanut butter has been known to be used as an excellent lubricator on rusty old blades, for animal medicine, a butter replacement, mousetrap bait, and price tag removal. When entering foreign markets it is essential to have a clear understanding of the economic conditions of the country in order to properly promote the product in the marketing process so that the development, execution and measure of the campaign for the peanut butter run smoothly.
It is important that I visit the target market because on-site, I can talk to potential buyers in order to learn everything that I need to know about competition, local rules and distribution channels. By attending trade shows and events that are specific to the industry within Canada I can learn a lot of helpful information by taking notes on products, competitors, packaging and labeling of similar products. The marketing process can be tedious and stressful in starting the export operations. I will have to make sure that I have an export plan that is similar to a business plan but instead focuses on strengths, weaknesses, opportunities and threats that my company can face within foreign markets. My export plan will help me to define my objectives clearly in order to use the right tactics to reach my goals and gain more credibility. My plan states how I can make my product adaptable to Canadian markets and will aid in determining sales price and how much time will be required to meet my objectives.
The best way to enter the Canadian markets is through efficient entry strategies which involve selling directly to end users and foreign retail markets will buy directly from ConAgra Foods. In ConAgra’s consumer goods business, there is no one factor more important than brand awareness. We are aware that if a customer recognizes my brand, they are more likely to buy it which will increase the sales of the product. The product will be shelved on stores according to the popularity among customers or the most sales. The advertising campaign should increase brand awareness amongst some of our other products in order to get better placement in other Canadian markets as well. “An effective marketing mix also includes market segmentation, targeting and positioning the product for competitive advantage.” (Food Export Association of the Midwest USA and Food Export USA, 2011). “In international marketing, it may sometimes be useful to see countries as segments. Country level segmentation may be done on levels such as geography—based on the belief that neighboring countries and countries with a particular type of climate or terrain tend to share similarities, demographics or income.” (Pernerm, 2012).
Income segmentation can be a bit tricky. This is because relative prices between the U.S. and Canada may differ significantly. This is based upon purchasing power parity that measures which greatly affects the relative cost of imported and domestically produced products. “Proper execution of these procedures requires quality research and consultation from export assistance providers, export service providers and customers in the foreign market.” (Food Export Association of the Midwest USA and Food Export USA, 2011). “The Marketing mix and the 4 P’s are the controllable elements of business.” (Food Export Association of the Midwest USA and Food Export USA, 2011). For instance a company has control over what product it makes, what price it sells the product for, how it wishes to place (distribute) the product and how it wishes to promote it. Introducing new products is a very good way of achieving differentiation and enhancing a retail identity in an over-subscribed retail market, but without corporate support new products may fail or go unnoticed. Because I want to expand Peter Pan, Peanut Butter to Canadian markets I need to perform an environmental analysis at the beginning of the marketing process as well as throughout it.
Political and Legal forces, Economic forces, Socio-cultural forces and Technological forces are known as PEST factors of the micro-environment. “An examination of Canada’s political orientation and environment is part of the preliminary screening stage of market select.” (Zekiri & Angelova, 2011). I have to carefully study Canada’s government structure of the Canadian markets and their political system. In addition, I must perform efficient risk assessments because of high levels of uncertainty in terms of continuity of government policies, changing political philosophies that are evident in Canadian markets. Political risk factors are divided into 4 levels, general instability, expropriation, operations, and finance. If any of the levels uncovers risk, which may be deemed unacceptable, the firm should immediately reconsider conducting business within Canada. Barriers of entry will also have to be assessed because it can also be a factor that could possibly make it difficult to break into Canadian markets. Tariff and non-tariff barriers make “companies already in the market more valuable as they reduce the risk of new competition.” (Zekiri & Angelova, 2011).
These “entry barriers are imposed by governments in order to protect domestic industry or to ensure that companies entering from foreign markets conform to trade relation’s arrangements with other countries.” (Zekiri & Angelova, 2011). “Barriers to exit are obstacles to market players who realize that they will not turn a profit and would like to quit the market.” (Zekiri & Angelova, 2011). “From an economic perspective, it makes sense to produce and sell an additional unit of product or service if the revenue generated covers at least for the variable costs.” (Zekiri & Angelova, 2011). Another important variable to consider because of impacts that court of law decisions may have upon a company’s globalization attempts is its legal environment. ConAgra could face a vast amount of problems in my efforts to develop a successful strategy. “Understanding the legal environment of target countries is considered of great importance in terms of market selection, due to the detrimental impacts court of law decisions related to issues such as foreign exchange rates, expropriation and intellectual property rights, jurisdiction, patents, trademarks, licensing, antitrust and bribery, etc.” (Zekiri & Angelova, 2011).
I will also have to pay close attention to the economic development and performance of Canada. Canada’s stage of economic growth will have a great impact in my foreign strategies. “Economic growth affects a countries attitude towards foreign business activity, the demand for goods and the distribution system found within the country.” (Zekiri & Angelova, 2011). “So, a study of the economic climate is important especially to gain understanding with regard to developing countries and secondly in respect to market potential and market growth.” (Zekiri & Angelova, 2011). “The existing level of economic development allows the firm to estimate the degree of market potential as well as allowing them to prepare for economic shifts and emerging markets.” (Zekiri & Angelova, 2011). ConAgra’s direct competitors of packaged foods in the U.S.are the H.J. Heinz Company, Mondelez International, Nestl, Tyson Foods, and Smithfield foods. International competitors are Gordon signature, GFS, Markon, and Trade East. Many Canadian brands believe very strongly in marketing that it’s more than simply a service offering.
They believe that it starts with a clear understanding of demographics and competitive landscape. Canadian brand managers are experienced, senior level professionals with combined sales and marketing backgrounds across an impressive range of tier-one companies within their industry. But as with most marketers ConAgra’s team has built collectively and individually, vast extended networks of highly specialized and talented marketers. As ComAgra’s landscape continues to change, they are committed to learning, understanding and working in new environments in order to ensure they reach the highest potential for all of their principals. Peanut butter is in 90 percent of households and most families with kids consider it a staple and kid-friendly food.” (Ashman & Beckley, 2006). If you were to ask many people to name their favorite brand of peanut butter you may get a few different answers such as Skippy, Jif and Peter Pan.
The product largest consumer base comes from families with children, preschools and K-12 schools. “While today’s harried parents can choose from an array of prepackaged lunch options, the classic PB&J remains as convenient as it is healthy and tasty.” (Gidman, 2009). “This means that the three major peanut butter brands—plus several smaller ones—will have to employ successful branding to secure a place in the American lunch box.” (Gidmanm, 2009). “Manufactures are responding to consumers’ hectic lifestyles by creating packaging that assists convenience. Peanut butter comes in squeezable packages, with jelly and as a premade sandwich.” (Ashman & Beckley, 2006). In Peter Pan’s advertising campaigns from the 1950’s they showcased “Youngsters Prefer Peter Pan Peanut Butter” within their ad.
The advertisement influenced mothers shopping for their children by using a charming little blonde haired boy enjoying a piece of bread covered with peanut butter because the advertising agency knew that showcasing a motherly figure or a mother, would get the mother to associate that child with a child of her own. They also printed the advertisement using calm colors that allowed the viewer of the ad to think relaxing thoughts. Good marketing ethics affect organizational success. Ethics are the principals a person or department uses when making a decision. The truth is, the advertising ad can be a little misleading because just because that little boy in the ad likes that peanut butter, this doesn’t mean that every little child will like it. “Misleading advertising is a common ethical dilemma. Although regulation provides formal boundaries of what an advertisement can and cannot say, marketers must consider the ethical boundaries.” (Okely, 2009).
“Ethical behavior by the marketing department will make the department and even the company a more attractive place to work as the company’s good reputation will transfer to its employees. Motivated, proud employees will improve performance.” (Okely, 2009). “Bad marketing ethics will destroy a good reputations which is arguably much harder to build than sales numbers.” (Okely, 2009). Marketing plans are crucial to marketing managers in providing a more structured approach in marketing products to foreign markets.
Market managers specialize in targeting different parts of a customer base to increase demand for a company’s product or matches customers and different market segments to the products the firm produces. Foreign marketing is a very broad subject is importance to a country and to individual companies. I have examined the broader aspects of international trade in terms of difficulties encountered when trading I foreign markets including how countries are structured in terms of their economic development and some of the world’s trading blocks. Many problems have also been considered from a company’s standpoint and in each of the elements of the marketing mix are considered in turn in the context of how it should be manipulated when dealing in foreign markets.
Angelova, J., & Zekiri, B. (2011). Factors that influence entry mode choice in foreign markets. European Journal of Social Sciences, 22(4), 572-584. Retrieved from http://www.eurojournals.com/EJSS_22_4_12.pdf
Ashmanm, H., & Beckly, J. (2006, January 7). Educating consumers about peanut butter. Retrieved from: http://www.foodprocessing.com/articles/2006/258.html Food Export Association of the Midwest USA and Food Export USA, (2012). Compete and succeed in the international marketplace: The export marketing mix. Retrieved from: http://www.foodexport.org/GettingStarted/Content.cfm?ItemNumber=1288 Gidman, J. (2009, January 19). Peanut Butter brands go nuts. Retrieved from: http://www.brandchannel.com/features_effect.asp?pf_id=460 Okely, L. (2009, June 26). Common ethical dilemmas faced by marketing departments. http://www.helium.com/items/1496496-ethical-issues-faced-by-marketers Perner, L. Ph.D. (2012). USC Marshall: International marketing. Retrieved from: http://www.consumerpsychologist.com/international_marketing.html Wegrzyn, N. (2011, December 20). The consumer value equation. Retrieved from: http://popsop.com/52197