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Company Introduction

One does not need to look far to witness a variety of contributions to our everyday lives from the talented scientists and researchers, past and present, at Proctor & Gamble (P&G). At least one P&G product can be found in virtually every home in the United States, and the Company’s products are in 140 countries worldwide. P&G credits its success in product innovation to deeply understanding consumer needs and desires then bringing these to life through cutting-edge science and technology.

Every day consumers purchase P&G products – from deodorants, shampoos, laundry detergents, cake mixes, coffee, and other food products. They take for granted that these products will be safe when used as instructed. They can make that assumption because highly qualified P&G scientists have carefully evaluated each product. At Procter & Gamble it is important to ensure the safety of our products in order to keep and honor the trust consumers? place in our products.

Research and development is very important to Procter & Gamble. Mr. John Pepper, our Chairman of the Board of Directors Executive Committee, puts it this way “People think of P&G as a marketing company, but we are first and foremost a research and development company. R&D is the lifeblood of our business.”

Executive Summary

Increasingly, firms are forming strategic alliances as a means of sustaining and enhancing their competitiveness in the marketplace. Joint efforts enable partner companies to improve their flexibility and efficiency, reduce their competitive and demand uncertainties, accelerate their product and geographic market entry, and better control their environment. Over the last decade companies in a wide variety of industries began to realize that having all the necessary skills and competencies to offer quality products and services is virtually impossible. Many products offered in today?s markets represent the combined skills of a variety of industries. No single company is likely to have all the resources needed to compete effectively. By adopting the competition-through-co-operation approach, goals can be met.

Our projected target day to product launch is dependent on a unanimous vote with senior management of P&G. We estimate that November 2000 will be our widow of opportunity prior to the holiday season. Our start up budget of approximately 20 million has been calculated for legal fees, operating cost and the renovation of our new facility. The new production plant will be in a separate location from the plant that produces our regular brand of peanut butter. We purchased a closed down food processing plant and renovated it to meet our needs. Corporate offices will be in short driving distance from each plant.

Our company has chosen to have a traditional organizational structure. This structure will consist of the President, Vice President of Marketing, Vice President of Sales, Vice President of Sales, Vice President of Production and a Vice President of Human Resources.

The management structure of Peanut Free is matrix departmentalized. This will allow for each of the respective areas to be set up so that each Vice President will be in charge with overseeing all the functions required to produce or market our product.

Situation Analysis – Background

Jif, a Proctor & Gamble subsidiary, is looking to diversify into a new market. We are looking to develop a new and improved peanut butter like product. Our brand of peanut butter would be different and something we feel consumers are ready for. We will produce a synthetic product that is not only low in fat but also safe for those who are allergic to peanut products. Our research and development department has been working for the past 10 months to come up with the perfect formula. We have received FDA and clinical support by the top 10 allergists in the country. Our intention is to remain privately owned for the first year of business, and then go public.

A new study found that about one in 100 Americans is allergic to peanuts or other nuts, but nearly half of those who have had telltale allergic reactions have never consulted a doctor. Studies show that about 1 in 100 Americans is allergic to peanuts or other nuts, but nearly half of those who’ve had telltale allergic reactions-itchy mouth, hives, or tightness in the throat-have never consulted a doctor, a new study finds. In addition, less than 1 in 10 of these folks have quick access to injectable epinephrine, which is essential to halting a severe reaction.

We will focus our marketing strategy towards parents who have children with this allergy, however we will also show the benefits to those persons who have a love for peanut butter, but want a product that is better for them. Over 75% of American households consume peanut butter. We have noticed that recently more consumers are purchasing peanut butter spread that advertises less fat. Americans are more concerned these days about their health, and we feel the time is right for our new and improved peanut-free butter.

Work is being done to develop a vaccine that can desensitize those with the allergy. Researchers are in the process of identifying the specific proteins in peanuts responsible for the reactions. In the meantime Proctor & Gamble and Jif have been able to develop a new hypoallergenic peanut butter spread that tastes like the real thing.

Public Relations

On the Public Relations front, we chose the strategy to attract product reviews in relevant publications, which, in turn, were used to interest research companies in the idea of working with us. Our intention was to find a reputable research company that needed a link to the food industry. In many respects P&G was used as a conduit to get exposure in the (Allergenic) industry. We were able to piggyback their own PR activity with our company?s.

Our Public Relations Department understood how critical it was to measure the PR. This was completed by using simple metrics such as weighting the publications, speaking appointments etc. We also monitored distribution to measures product awareness and sales generated from each PR activity.

Product Description

The product that we have produced is a peanut butter like product for people that are allergic to peanut products and for those that are very health conscious. The product will have all the benefits of peanut butter, but will be completely safe for anyone with the allergy. It will provide the same healthy, high protein meal or snack as regular peanut butter with the same great taste. It will offer an even healthier alternative for nutrition conscious individuals who love the taste and convenience of peanut butter but do not want the high fat, sodium and sugar content.

Target Marketing

We will be trying to reach two different segments in our target market. The first and main market segment would be the 1% of the population that suffers from peanut allergies. The other segment we will try to attract will be health conscious individuals and eventually anyone who eats regular peanut butter.

Our research shows that our key market segment is the family of children with the peanut allergy. The parents of children with this allergy want to have the same quick and easy convenience of peanut butter to offer their children. Unfortunately, it is too dangerous to have real peanut butter in the house for those without allergies to enjoy because often even just the smell can cause a serious reaction in those with the allergy. We plan to give these consumers a safe and healthy alternative that their whole family will be able to enjoy.

The other market segments that we will be trying to reach are those that are very health conscious. We will offer them a better product to use than peanut butter. It contains the same high protein, high energy, and convenience of peanut butter, but is much healthier for them to consume. . Our organization will use the Casual Methodology approach for quantitative forecasting. Casual forecasting will allow us to use the initial statistical data collected by Press, Ganey in addition to the first and second years sales projections by our VP of Sales.

Consumer Market

Most consumers buy products that give them the best value for the money they are going to spend. Some of the factors that influence buying behaviors and how our product fills them as follows:

- Economy of purchase or use ? Our product will be a very high quality, good tasting product that will be relatively inexpensive to purchase

- Convenience ? Our product will be easy to use and store and will provide a quick and healthy meal or snack alternative.

- Efficiency in operation or use

- Dependability in use ? Consumers will now that every time they purchase our product they will be buying a quality product.

- Improvement of earnings ? Our product will be inexpensive and we will offer regular coupons and discounts to encourage repeat sales.

Consumers make purchases based on their needs. We will be focusing on the need for a safe product and changing their perception of a peanut butter like product. We will work to ensure the consumer that our product is very safe for those with a peanut allergy and also a much healthier alternative for those that don?t.

Competition -Strengths and Weaknesses

Currently there are no direct competitors for this specific product. It is a new and innovative product, which has been created specifically by our Research and Development teams.

The indirect competition?s strengths lie in that they are well known and already established. They each have a very loyal following of consumers. We might find it difficult to tempt their more health conscious customers because of brand loyalty. Many of these companies are already offering low fat, low sodium products.

Our indirect competitors biggest weakness is that they produce only regular peanut butter, which our most important marketing segment is unable to use due to their allergies or the allergies of someone within their family or household. They have completely neglected this segment of the population, which will give our product an advantage. Although these companies offer low fat and low sodium products, most of them compromise taste.

Strengths and Weaknesses

Our organization is very lucky to be getting in on the ground floor of this product. We have created a much-needed product and have the opportunity to be the first to offer it to consumers. Our market research has determined that consumers are demanding a non-allergy alternative to peanut butter. Our organization is a leader in innovative products and this product should prove to be very successful. We currently will have no competition for this product and we will be putting our name on it, which is a name that consumers already know and love.

The main obstacle with this product is that it is a brand new product. People are not familiar with it and due to the nature of peanut allergies, they may be leery to trust and try our product. We will have to make sure that our customers understand that this product is not produced in the same factory with our peanut products so there is no chance of the product becoming contaminated. It might prove difficult to overcome the fears associated with a peanut like product.

Opportunities and Threats

Our organization will be getting in on the ground floor of this product. There are no organizations currently offering this product and we will hold the original patent to produce it. It will give us the opportunity to break new ground in offering allergy sensitive products and we will be able to reach a whole new segment of the population.

The biggest threat to our product is customer doubt and fears. We need to be able to convince our target consumers that our product is a safe alternative to regular peanut butter and because there are no peanuts in it, it will be completely safe for people with peanut allergies.


Research shows that over 75% of American households eat peanut butter on a regular basis. We have found that 1% of Americans are allergic to peanut butter. This is a fairly large percentage of the population and when we add the percentage of families or other members of their households that can not eat peanut butter either we have expanded the market significantly.

We are expecting first year sales of about 40 million. Our strategic plan is to increase sales revenue by 20% in two years. We feel that slow, steady growth will allow us more success in the market place. We will introduce our product to the home state, as well, as the five surrounding states. By starting out with six states we can use Press, Ganey Associates to survey this segment of the market after about one month and gage their response to our product. This will give us a chance to make any needed changes before we go nationwide. Our VP of Sales and VP of Marketing clearly outlining our quarterly target goals have developed a strategic plan. Once we have a hold on our first initial six states then we will move from east to west covering all states. By the end of the third quarter we hope to be in all 50 states.

After our first year we will evaluate our sale and profit margins and make a determination if we are ready to move into Canada, Mexico, and Europe.

Objectives and Goals

? Company Objectives for Proctor & Gamble and Jif are to provide high quality innovative products that consumers can trust and to make a profit doing so.

? Production Objectives are to produce a high quality product as efficiently as possible with little wasted time, labor, and costs.

? Finance Objectives are to achieve the highest profit margin possible by streamlining and keeping costs and expenses as low as possible.

? Marketing Objectives are to reach our target market and market segments as thoroughly as possible and encourages them to buy our products.

- Product objectives are to produce a high quality, allergy free, healthy product for consumers that have a peanut allergy and/or are very health conscious and would like a substitute for regular peanut butter.

- Place objectives are to make sure that all major retail grocery store chains feature our new product and help to promote it as well as placing our product in health food and gourmet stores.

- Promotion objectives are to make as many people aware of our product through mass marketing.

? Personal selling objectives will be reached by sending our sales staff to promote the product through doctor and allergists offices as well as by speaking directly to supermarket, health food and gourmet store managers.

? Mass selling will be achieved by television ads, magazine ads and grocery store end cap displays.

? Sales promotion objectives will be to offer coupons, free samples, taste tests, brochures and literature for our product.

- Price objectives are to keep the price as low as possible so that the product is affordable to most income levels.

? Research & Development Objectives are to continue to work on improving the quality of the product as well as expanding the product line.

Marketing Strategy Statement

Our marketing strategy is a simple one; we will supply the market with a product that is much needed by many people. We will focus on the needs of those with food allergy to peanuts. This group of people will now be able to enjoy the great taste of peanut butter without the risk. We will also market to those consumers who are health conscious and weight conscious but still want the taste of real peanut butter. Our product is the one!

We will be using a multiple target market approach so that we can target each of the segments individually. Our focus will be on the segment that has peanut allergies. We are going to offer them a new product that is safe for them at a great value. We will not be focusing on this as a substitute product, but rather a gourmet or special product.

Campaign – ?Without The Nut?

Although we wanted to tailor our marketing efforts to each individual consumer, there is an opportunity to roll out a promotional campaign to nationwide retailers. This would be affectionately known as, ?Peanuts Without The Nut?. This campaign would send samples in conjunction with supporting documentation on the safety of our product to target market physician allergy specialist and highly visible retail grocery chains in target market areas. We wanted to provide future consumers with product samples and marketing information to promote the launch and sale of our Peanut-Free Butter spread.

Another step that we took was to have our field sales force have face to face contact with each target physician group and retail store manager during our launch phase. We felt that this would be the beginning of a strong working relationship with each retailer. Electronic communication and correspondence will never replace physical contact.

We also developed a company advisory board. This board contained nationally recognized medical specialist, internal team members, marketing experts, and eight local community members. This board was formed to provide feedback on the current state and the future development direction of our company.

Action Programs

The main target markets are those people that are allergic to peanut products. In this instance, the product is specifically tailored to their need for a peanut butter like product without the allergen. We will emphasize the fact that the product is completely safe but offers the same convenience as regular peanut butter. The cost of the product will be similar to that of regular peanut butter, but slightly less. We want the product to be affordable to most income levels.

This product will be available in any store that sells peanut butter, but will not be in with the regular peanut butter. We will display a sign with our regular peanut butter products letting consumers know that this item will be in the specialty food and health food sections of their store.

Grocery stores will be able to feature this product on an end cap. Then we will offer samples for customers in stores at their peak selling hours so that the consumer may taste test the product before purchase. There will also be recipes available that feature this product as well as discount coupons off current and future purchases.

There will be a series of target TV commercials during peak times to make the public aware that Jif has come up with a new allergy sensitive product. There will also be ads in different parenting & health magazines to appeal to the parents of children with a peanut allergy.

A large part of promoting this product will be to make sure doctor and allergist offices are aware of the product. We will offer them free samples and brochures to distribute to patients that have this allergy. If possible, we will help make allergists and other medical professionals aware of our product through publicity and ads in allergy related medical journals. We will try to get publicity from some of the different allergy networks on the Internet. These organizations send their members free newsletters and email updates of new allergy related products that are on the market as well as offering free links to safe products.

The other market segment that we will be attempting to reach are those consumers that are very health conscious and looking for a healthy, high protein, low fat, sugar and sodium product that will help give them an energy boost. The target age range will be from the ages of 25-45 and be the YUPPIE type consumer

This product will be available in health food and gourmet grocery stores and will be marketed as a treat or more elite product not as a peanut butter substitute. We will place ads in health related magazines to help attract these customers. The packaging may be slightly altered to fit in with the different type of customer we are trying to attract.

Marketing Budget

We have projected an initial cost of commercial advertisement to be approximately $10,000.00 for 30-second spot. We will be working with ATT Media Services for all our advertisement needs. We will be featuring our 30 second commercials on the six following network programs: Food Network, Fox Family Network, Home & Garden TV, Lifetime, The Discovery Channel and Nickelodeon. The average 30-second spot costs approximately $2,000.00 per showing and we have chosen the hours of 4 PM to 12 Midnight. Our target market will be mothers and children.


Peanut Free has chosen Market Strategies, Inc. (MSI) is a full-service research organization with the internal capabilities to design and execute all phases of Information Systems. They will be working with company managers to develop our Information Systems Department?s initial design, data collection, and reporting requirements during our initial phase of implementation. They will also provide ongoing consultative services until this process is completely internalized. The ability to provide the services in-house enables MSI to ensure a high level of quality control at all stages of the project, respond quickly to their clients’ needs, and maintain tight control of project schedules and budgets. In addition, assist our company with the measurement comparison and analysis.

Press, Ganey Associates and Market Strategies have formed an alliance to provide a multi-mode approach to customer satisfaction data collection. When appropriate, Press, Ganey will administer mail surveys and Market Strategies will conduct the telephone interviews necessary to obtain NCQA-required response rates. This unique collaboration has enabled the firms to become NCQA certified.

By combining their services, Press, Ganey and Market Strategies will offer clients exemplary research studies that will be used by food product companies throughout the country to improve the quality of health related food products.

For these reasons, our company has chosen the Press, Ganey Associates and Market Strategies team. They offer the leading line of tested and reliable satisfaction surveys, comprehensive management reports, and national comparative databases which will be necessary for us to make sure we are satisfying our customers.

Monitor Plan Progress

? Survey Forms

? Taste Test

? Telemarketing

? Consumer Hotline for question and comments

? Report From Press, Ganey Associates which will provide us with:

- Actionable data

- Current, meaningful information regarding our product

- Continual feedback on our progress in sales distribution

- Timely reports to our company for immediate action

- Assistance in using our data to improve quality and satisfaction

- The world’s largest satisfaction measurement database for comparison

The first six months of production we would put a short survey form on each jar Peanut Fee. The customer can mail the survey form back to the company with proof of purchase and they will receive a coupon for 20% off the next purchase.

There would be taste tests conducted in the grocery stores. The customers would be offered a coupon for 20% off when they do a taste test.

Telemarketing representatives would make random calls to consumers. The consumer would be interviewed and asked various questions about their use of peanut butter. The telemarketer would try to find out what brand of peanut butter they regularly buy and why they buy that brand. They would also try to find out how often they eat it and who within the household enjoys it. For participating in the survey the consumer would be mailed a 20% off coupon.

The consumer hotline would monitor concerns and complaint calls. The calls would be logged and the results forwarded to the consumer hotline manager. The manager would bring the results to the monthly managers meeting. If it were found that a consumer has a valid complaint, then the company would send the consumer a letter of apology and a coupon for 20% off their next purchase.

Reports from Press, Ganey Associates will also be evaluated at the monthly managers meeting to gain a further understanding of what the customer is looking for and how we can give them what want.

Custom Analysis Reporting

Press, Ganey will utilize conduct and interpret DataQuest Custom Analysis Reports on all customer satisfaction data. DataQuest custom analysis is the perfect tool to provide our company with current customer satisfaction initiatives that will maintain our focus on appropriate target markets.

Customer analysis will be invaluable to our quality performance initiatives:

? For implementing and monitoring quality improvement programs

? As a management tool to drill down deeper into your customer satisfaction

? To assist in company goal setting

? For problem solving with distribution

? As a progress report (current state)

These custom reports will provide us with an on-going feedback for our product. We will be utilizing the following reports:

? Interim monthly customer satisfaction reports

? Monthly Reports on sales and customer satisfaction

? Product distribution – Means and Rank Reports

? Competitive Analysis Reports

In conclusion, both senior management teams at Jif and Proctor and Gamble feel confident that Peanut Free with rank number one in the new generation of allergenic food products.


(April 16, 2000) HealthLinkUSA [Online] Available: http://www.healthlinkusa.com/116feat.htm

(April 16, 2000) Peanut Allergies [Online] Available: http://www.peanutallergy.com/sponsorspage.htm

(April 17, 2000) Procter & Gamble [Online] Available: http://www.pg.com/cgi-bin/cgiAbout/food.cgi?about

(April 19, 2000). Press, Ganey [Online] Available: http://www.pressganey.com

(April 21, 2000). Best Foods [Online] Available: http://brands.bestfoods.com/skippy/funfacts.asp#about



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