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Executive Summary
Introduced in 1958, Jif is a leader in the United States in the peanut butter industry. Jif currently has over 13 different peanut butter spreads, three nut butter spreads, and fifteen different snacking items. Americans eat three pounds of peanut butter per person yearly (Blakinger, K. 2018).
The growing Peanut Butter demand in the food industry has provided a major boost to the Global Peanut Butter Market (Global Peanut Butter). In the United States, the market is expected to keep rising at a high CAGR and reach values of high millions by the end of the forecast period of 2018 up to 2023. Jif plans to increase its presence in the market with the addition of by creating a jar that has lids on both ends. In the middle of the jar, there would be a divider to section the jar. One section would include peanut butter and the other section would include a flavored jelly. The customer would be able to make a sandwich with one product as well consumers would no longer have messy hands trying to scoop the peanut butter from the bottom of the jar.
Company Description
Jif started out as a product of Proctor & Gamble and had to work itself up from the bottom shelf like most other companies. Proctor & Gamble has many other brands such as Downy, Bounty, Charmin, Pringles, and many more. Proctor & Gamble entered the peanut butter business in 1958 with Jif (Honest Invention Company, 2011). Now owned by JM Smucker Company, Jif produces 250,000 jars of peanut butter every day. In 2013 due to the rising demand for Jif peanut butter, Smucker has more than doubled the size since purchasing it in 2002. Jif has been the leader in peanut butter since 1981. Jif currently has over 13 different peanut butter spreads, three nut kinds of butter and spreads, and fifteen different snacking items.
Jif is committed to offering consumers quality products that bring families together to share memorable meals and moments (All About Crisco). Since athletes eat protein for energy Jif has been a promoter of a 3 on 3 youth soccer tournament as well as the Wal-Mart FLW Fishing Tour, which promotes Jif (Move Over Jelly, 2012). In addition, they are a proud partner of the Boys & Girls Clubs of America.
The companys wide variety of peanut butter spreads is sure to put a smile on everyones face. In addition, you will find three types of nut kinds of butter and spreads. For a pick-me-up, try one of Jifs Power-Ups. The Power-Ups either come as a chewy granola bar or a bite-sized granola cluster. Jif also offers coated popcorn to satisfy your craving. Jif To Go is peanut butter in a convenient, right-sized cup. Perfect for dipping your favorite snack (dump1, Puddles12, wisdomseeker1980, Alaskabelle, & Bigdog, 2012).
Company Objectives
Mission
The mission of Jif is to nourish kids while spreading a little more love in the world.
Financial Objectives
- To secure most of the Peanut Butter market.
- Increase sales by 3.
- Donate at least $25,000 a year for peanut allergy awareness/research.
Nonfinancial Objectives
- Enter new geographic markets, including areas overseas.
- Maintain strong relationships with both retailers and consumers.
- Improve employee turnover and satisfaction.
Situation and Competitive Analysis
Even though Jif sales in the U.S. have been growing for the past two years, Jif will soon be facing some challenges. The costs to make peanut butter are rising therefore they are receiving less profit from each product sold. Low-cost private-label brands are making it hard for Jif to raise the price. JM Smucker faced a class action lawsuit claiming that its peanut butter was all natural. Jif has to follow stiff regulations by the Food and Drug Administration. Jif is expected to have an increase in revenue in of 1.09% in 2019. Total revenue is predicted at 1982.2 million dollars. However, a dry hot summer can be harmful to the peanut crop leading to price increases and lower sales.
Political and Technological Jif expands and adds jobs at three facilities in Memphis, Tennessee and Lexington, KY., and receives tax breaks. Also adds new equipment and other improvements in the Memphis plant. Jif is committed to their consumers, as well as dedicated to supporting a supply chain that is always mindful of its economic, environmental, and social impacts. Though palm oil represents a relatively small percentage of their commodity purchasing, we have committed to developing a fully sustainable and traceable palm oil supply chain that ensures 100% of our direct palm oil purchases are from responsible and certified sustainable sources by December 2015 in order to protect forests, protect peat lands, and foster positive impacts on human and community rights (About Jif Peanut Butter).
This SWOT analysis will highlight Jifs strengths, weaknesses, opportunities, and threats. Strengths include strong brand recognition, the number one peanut butter brand, a loyal customer base, the largest peanut butter plant, an Olympic sponsor, and a wide variety of products. Weakness cost competition with non-generic brands, no overseas company.
An opportunity for Jif is overseas expansion, offering free samples at events or stores, and additional options for health-conscious consumers. Threats include increased competition, risk of salmonella outbreaks, unfavorable weather conditions, and a rise in peanut allergies.
Today, peanut butter is consumed by 90% of American households (Whats the Sitch, 2017). In 2017, Jif had 587.8 million dollars in sales. They are an Olympic sponsor and are providing sample products to coaches and athletes daily. Jif can be purchased at most supermarkets, as well as Wal-Mart, Target, and Sams Club. It can also be purchased at Amazon.
Major competitors include Skippy and Peter Pan. Skippy is Jifs closest competitor with annual sales of 195.6 million in 2017. Skippy can be purchased at the same locations as Jif. Coming in at number three is Peter Pan. In 2017they owned 171.9 of the peanut butter market. Due to a salmonella outbreak, theyve had to pull their product off the shelf.
Target Market
The slogan Choosy Moms chose Jif indicates the target market is mothers. In the early 2000s, Jif broadened their target market, now they use the slogan Choosy Moms and Dads Choose Jif. Jif noticed that moms are no longer the only ones who go to the grocery store and by adding dads to the slogan they expanded their market.
Moms are dads are the ones who tend to make healthy and convenient choices. These consumers mostly shop at grocery stores, but for larger quantities, they go to Sams. Families are always on the go and Jif is a quick solution for a healthy nutritional snack. Jif can expand its market with the addition of half peanut butter and half jelly to low-income families, they will avoid buying two jars.
Peanut butter and jelly sandwiches are a staple of childrens lives in many countries. Major competitors include Skippy and Peter Pan. These two brands make flavored peanut butter spreads but does not hold peanut butter and jelly in one jar.
Consumer Decision Process
The first step of the decision-making process is need recognition. Many peanut butter and jelly consumers have stated a need for a less messy way to make their sandwiches. Jif has recognized this demand and wants to change consumers’ unsatisfied needs into a desired state.
After recognizing this need Jif at once began to second step of information search. They begin with the external search for information, by asking friends and family members for information. In addition, a few members of this team will go to a grocery store to ask peanut butter consumers for information about the newly researched product.
Evaluation of alternatives is where the consumer takes part in the information search. The consumer will place different levels of importance on each attribute they choose that is most important to them about buying this product. They can turn to friends and family members, consumer reports, or salespeople to get the desired information.
Now that the consumers have evaluated the alternatives, they are ready to buy the product. All risks have been considered and the consumer is ready to buy the product. The customers have read reviews and compared prices, they have finally chosen the product that meets most of their expectations. In-store demonstrations will be used to attract people to sample the product. Before Jif spends a lot of money on this peanut butter and jelly jar with two lids, they will test this item at grocery stores, school lunchrooms, and daycares to make sure there is a high demand for this product. After promotions are in place and consumer reactions are seen Jif will then decide on whether to produce this item.
Finally, the post-purchase phase. Post-purchase information will be closely watched to determine the actual customer’s responses. This information will show customer satisfaction and customer loyalty.
Marketing Mix
Product Strategy
Jif currently has over 13 different peanut butter spreads, three nut butter spreads, and fifteen different snacking items. Jif offers peanut butter spreads including creamy and extra crunchy peanut butter, low sodium creamy and crunchy, and honey flavored in creamy and crunchy. In addition, it offers a creamy Omega-3, simply Jif, or reduced-fat peanut butter. Their flavored spreads include cinnamon and maple, while their whips are creamy whipped peanut butter or whipped peanut butter and chocolate. Nut kinds of butter and spreads include a creamy almond butter spread, cookies n cream hazelnut spread, and chocolate cheesecake flavored hazelnut spread. The on-the-go snacks included granola bars in the following flavors: creamy peanut butter, chocolate flavored with peanut butter, salted caramel flavored with peanut butter, strawberry with peanut butter, and banana with peanut butter. Also offered are strawberry poppers, peanut butter poppers, and chocolate poppers. Or Jif offers a single creamy serving cup called To Go.
Jif is a well-recognized brand, with high-quality products, consumer trust, experienced brand and category management, a single national grocery broker in the U.S., varied product offerings, product innovation, good customer service, and an integrated distribution network (CIS Market). In 2018 Jif was the brand of peanut butter eaten most often within one month in the United States (Statista). You will pay a little more for a jar of Jif peanut butter however, it ranks above its competitors in terms of nutrition. Jif is in the growth stage of the product life cycle due to its strong growth in sales and profits.
Price Strategy
Since Jifs major competitors do not offer a product like this will have a small effect on demand. Therefore, if the price needed to be increased on this product it will have a small effect on the consumer. However, Jif will price this product at a price that customers will feel comfortable in purchasing. Jif will use penetration pricing by setting a low initial price to quickly get into the market. This approach will bring new consumers, create positive branding as well as increase market share. High sales volume will lead to lower production costs. A 2% cash discount will be offered to buyers who pay within 10 days after receiving the invoice. The two-in-one jar will be priced lower than buying a jar of peanut butter and a jar of jelly.
Place Strategy
To start the process of integrating the doubled jar into the market, Jif would start with individual serving-size packages, like Jif To Go. Since JM Smucker Company has established distribution channels will be used. You can find Jif products in many locations such as supermarkets, Walmart, Target, and Sams Club or you can order them online. This double jar of peanut butter will need intensive distribution as it is new, it will need to be at every outlet. Since this product has a long shelf life it will be transported by truck.
Promotion Strategy
To effectively gain traction in the market share, Jif needs to put a strong focus on its initial promotion efforts. This will consist of sampling, smaller trial-size packages, coupons, and advertisements. Jif will communicate with its consumers and retailers via social media as well as personal contact. Contact will be made in person when applicable and by phone when face-face conversations cant be made. In addition, store visits will be made quarterly to check on the satisfaction of the product. Advertising will be very important because this is a new product on the market. Jif needs to get the word out about how this product stands out and why consumers should choose this product. This product will be advertised in magazines and newspapers that parents would read. In addition, television and radio ads will be utilized. For two weeks, free samples and coupons for 25% off will be handed out at each of the locations where Jif is sold. Sampling will allow Jif to make an impression on those who make the purchasing decisions. Public relations will be used to launch this new jar with two lids. Public relations will be used to generate additional revenue through greater awareness and information for all products offered by Jif. The public relations staff will work with retailers to offer short-term sales promotions and contests. Also, Jif donates to peanut allergy awareness and research, creating positive public relations.
Associates
Accounting
This department watches the financial condition of the company. They review the financial reports to calculate the expenses and profits from the new product. In addition, they will supply the needed reports to upper management for their review.
Finance
Developing a product is risky and expensive the finance department is one area that is responsible that the new product’s success. While the accounting department focuses on the day-to-day activities of the company, the finance department looks at the future for growth and development. They have a big role in the success or failure of the product. Finance supplies the information needed to aid managers in making strategic decisions.
Research and Development
To achieve marketing success, the research and development team will come up with a new product or ways to listen to future consumers on the proposed idea. When a company goes through research and development, it will have a greater chance of launching a successful product than a company that doesnt go through the research and development process. They will take the research findings and begin the development and test phase.
Purchasing
Once consumers are familiar with the new product, they will be ready to buy it. To get buyers to buy the product the packaging of the product will need to be evaluated. After the product has been put on the shelf the product will be watched to see if the packaging design is working or if it needs to be updated. When changing the packaging it can target a new market or give the appearance of an updated item to the current market.
Production
Before launching a new product, the company will want to be certain it will be profitable for them. They should anticipate any problems that may arise along with solutions on how to fix them. In addition, how will production be set up, how will this product fit into the current supply chain, and how will the product be distributed?
Personnel Functions
Many people from different departments are needed when deciding whether to launch a new product to watch its continued success in the market. The company will need to keep personnel involved as much as possible even asking for their input on ways to improve the product. When the employees know about the product, they will be happier and work better together as well as answer any consumer questions.
Firms
Launching a new product can be hectic and involves many employees. If the product is successful, the company will need to hire more sales and support staff to keep up with consumer needs. On the other hand, a poorly launched product may cause consumers to lose trust and confidence in the firm.
Consumer
When launching a new product, it is important that the consumers are aware of it and then to getting them to try it. Once they have tried the product the company will want them to have a positive experience so they can rely on the customer for word-of-mouth advertising and brand loyalty. When launching a product, it is important that this item satisfies the buyers’ needs and wants.
Society
As consumers are becoming more aware of the environment it is even more important for organizations to be more visible in society. Companies can play an important role in public health, social inequality, and pollution. Some consumers will research what a company does for society before deciding whether to buy a product or not.
Works Cited
- American Peanut Butter Market. What’s the Sitch?, 24 Apr. 1970, www.whatsthesitch.com/2014/4/2017/american-peanut-butter-market.
- BITS & BITES. Reduced Fat Creamy Peanut Butter 60% Peanuts – Jif Peanut Butter, www.jif.com/products.
- IEG Sponsorship Report. IEG, www.sponsorship.com/iegsr/2012/06/11/Move-Over-Jelly–Peanut-Butter-Brands-Scoop-Up-New.aspx.
- J M Smucker Co’s. Lululemon Athletica Competition Market Share by Company’s Segment – CSIMarket, csimarket.com/stocks/compet_glance.php?code=SJM.
- Peanut Butter – United States | Statista Market Forecast. Statista, www.statista.com/outlook/40090400/109/peanut-butter/united-states.
- U.S.: Brands of Peanut Butter Consumed 2018 | Statistic. Statista, www.statista.com/statistics/281227/us-households-brands-of-peanut-butter-consumed/.
- (n.d.). Retrieved from https://www.jif.com/bits-and-bites.
- All About Crisco. (n.d.). Retrieved from https://www.crisco.com/about-crisco.
- Blakinger, K. (2018, April 9). For Sept. 13 National Peanut Day, here are 13 fun facts about peanuts. Retrieved from https://www.nydailynews.com/life-style/national-peanut-day-13-fun-facts-peanuts-article-1.2355374.
- dump1, Puddles12, wisdomseeker1980, Alaskabelle, & Bigdog. (2012, March 22). Jif To Go Creamy Peanut Butter, 12-Ounce. Retrieved from https://www.walmart.com/ip/Jif-To-Go-Creamy-Peanut-Butter-12-Ounce/15556216.
- Honest Invention Company. (n.d.). Retrieved from https://inventhelp.com/archives/03-11/inventhelp-newsletter-march-2011/the-invention-and-evolution-of-peanut-butter.
- LULU’s Competition by Segment and its Market Share. (n.d.). Retrieved from https://csimarket.com/stocks/competitionSEG2.php?code=LULU.
- Move Over Jelly: Peanut Butter Brands Scoop Up New Deals. (n.d.). Retrieved from https://www.sponsorship.com/IEGSR/2012/06/11/Move-Over-Jelly–Peanut-Butter-Brands-Scoop-Up-New.aspx.
- Nj. (2017, April 25). American Peanut Butter Market. Retrieved from https://www.whatsthesitch.com/2014/4/2017/american-peanut-butter-market.
- The Statistics Portal. (n.d.). Retrieved from https://www.statista.com/search/?q=palm&Search=&qKat=search.
- U.S.: brands of peanut butter consumed in 2019. (n.d.). Retrieved from https://www.statista.com/statistics/281227/us-households-brands-of-peanut-butter-consumed/.
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