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Executive summary
Market Context
Comprised of a number of massive brands and increasing technological developments, the
headphone market has grown from $1.6B in 2013 to $2.38B in 2023. This market is forecasted to
continue to grow as headphones have become a necessary accessory to smartphones and laptops.
Two of the major players in the segment are Apple, which accounts for 37% of the overall
market share in the US and Bose, which accounts for 13% market share. More than competing in
the headphone market, both these brands dispute the high-end luxury market, focusing on high-
income consumers.
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Key Issue
Present in the market producing aviation headphones since 1989 and consumer headphones since
2000, Bose conquered a reputation of a high sound quality and innovative brand. However,
despite this perception in the customer’s eyes, Bose heavily lost market share, dropping from
22% in 2014 to 13% in 2023 This market loss happened, under no coincidence, when Apple
entered the market.

Having a tremendous brand image in the smartphone market, Apple entered the headphone
market in 2016 with their AirPods and rapidly captured a great chunk of sales. It’s possible to say
that Apple’s ability to integrate with devices in the Apple ecosystem, high perceived quality and
design, and brand image were some of the key factors to this success.

It is interesting to mention though that, despite having a different story the market, Bose and
Apple provide products with similar features, such as noise cancelation, compatibility with all
Bluetooth devices, longer battery life compared to competitors, and premium sound quality.
These similarities make it difficult for some customers to differentiate these products based only
on technical specifications, which would put Bose at an advantage since it has a better sound
quality than Apple’s headphones. Instead, purchase decisions seem to be skewed towards brand
perception, aesthetics, retail experience, and aftersales services, all of which are dominated by
Apple.

Goals
This report aims to create a strategic marketing plan for Bose by identifying and targeting
appropriate customer segments, clarifying its value proposition, and creating actionable steps for
future marketing campaigns. By analyzing areas where Bose is lacking in each segment, we can
determine which segment to target, engagement techniques, and incentivize sales to increase
market share.

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Market and Industry Assessment

Peanut butter is a subcategory of the syrups & spreads market that consists of retail sales of
jams, jellies and preserves, molasses, savoury spreads, syrups, and sweet spreads. Peanut
butter, along with other sweet spreads, dominates with a 77.3% share of the syrups and spreads
market; jams, jellies, and preserves account for a comparatively small portion of the market at
9.0% (MarketLine, 2023). The peanut butter market in the United States is estimated to be
worth USD 6 billion in 2023, and is projected to reach USD 8.38 billion by 2028, at a compound
annual growth rate (CAGR) of 6.65% (Market Data Forecast, 2023) (National Peanut Board, n.d.).
Growth in the US peanut market is driven by demand for nutritious products and household
disposable income. With 94% of US households having peanut butter in their pantry, peanut
butter products are a consumer staple (National Peanut Board, n.d.). High-protein and low-
sugar are sought-after features in nut-based spreads, and consumers tend to prefer options high
in vitamins/minerals, fibre, and healthy fats (Market Data Forecast, 2023). The US Food and
Drug Administration (FDA) oversees the peanut butter production industry and requires that
products identified as peanut butter contain at least 90% peanuts (IBISWorld, 2022). Products
that do not meet this requirement are designated as peanut butter spreads (IBISWorld, 2022).
The market for peanut butter is highly competitive, with little product differentiation, meaning
consumer brand loyalty is especially valuable in this market. Brand loyalty creates barriers for
new entrants and hinders competitors’ efforts to capture market share. Producers compete
directly for shelf space not only against well-known peanut butter brands, but also against
retailers’ private label products. The industry faces further external pressure from substitute
products, such as chocolate spreads, fruit jams, and jellies. These alternatives provide
consumers with diverse options, potentially influencing their purchasing decisions.
The peanut butter industry is dominated by three brands, collectively accounting for
approximately 80.9% of the total revenue in 2022. As noted in Exhibit 1, JM Smucker Company’s
Jif brand holds the largest market share, followed by Post Holdings Inc's Peter Pan brand and
Hormel Foods Corporation's Skippy brand. This high concentration of market share among the
top three players indicates a significant level of consolidation within the industry (IBISWorld,
2022).
The US market has reached maturity and saturation, offering limited opportunities for growth
acceleration. Many manufacturers have introduced all-natural, reduced-fat, low-sodium, and
other specialty varieties in response to shifting consumer preferences (IBISWorld, 2022).
While peanut butter is primarily sold through grocery wholesalers, some companies have begun
leveraging their internal supply networks. The primary sales channels are supermarkets and
grocery stores, accounting for 32.1% of all sales; other retail channels, such as mass retailers,
specialty stores, and convenience stores contribute 34.3% to total industry revenue (IBISWorld,
2022).

Company & competitor assessment

The J.M. Smucker Company and “Jif”
Established in 1897 in Orrville, Ohio, The J.M. Smucker Company is a publicly traded American
multinational food product manufacturer. Initially focused on the production and sale of apple
butter, the company broadened its product range, securing a significant market presence across

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six distinct industries: Snack Food Production, Coffee Production, Pet Food Production, Dry Pet
Food Production, Peanut Butter Production, and Premium Pet Food Production (IBISWorld,
2022).
One of Smucker's most successful brands is Jif peanut butter, introduced in 1958 and purchased
by J.M. Smucker Company in 2001 (CNN, 2001). J.M. Smucker Company also owns and operates
well-known brands, such as Smucker's, Crisco, Folgers, Dunkin' Donuts, and Meow Mix. The
company's diverse product portfolio makes it a significant player in the global food industry (The
J.M. Smucker Company, 2023).

Hormel Foods Corporation and “Skippy”

Hormel Foods Corporation, a leading multinational food processing company, was founded in
1891 in Austin, Minnesota. Originally concentrating on producing and selling pork products,
Hormel Foods has since broadened its product range to include significant market share across
four key industries: Meat, Beef & Poultry Processing, Beef & Pork Wholesaling, Peanut Butter
Production, and Pre-Made Salsa Production (IBISWorld, 2022).
Skippy peanut butter, the third-largest peanut butter brand in the United States, was introduced
in 1933 and became one of Hormel Foods Corporation's most beloved and long-standing
brands. Along with Skippy, Hormel Foods operates other well-known brands, including Hormel,
SPAM, Jennie-O, Dinty Moore, and Applegate (Hormel Foods Corporation, 2023).

Section 2
Analysis and Mapping of Target Customer Segments
On the surface, Jif and Skippy peanut butter brands offer the same product to the market.
Segmentation of consumers is therefore critical to identify points of differentiation through
which each company may improve its market position. The following segments represent major
consumer groups, which are measurable, substantial, accessible, differentiable, and actionable.
Demographic Segmentation
Parents of small children: There are approximately 9.23 million families with young children in
the U.S. (Statista, 2022). The median age of new parents is 30 years old (Saady, 2023) and have a
median income of $101,560 (Kids Count Data Center, 2023). These buyers primarily purchase
peanut butter as a snack or meal ingredient for their children; therefore, their purchasing
behaviour is heavily influenced by their children’s preferences.
Health-conscious: Approximately 44% of Americans are pursuing healthier eating habits
(Buchholz, 2023); this segment includes athletes, dieters, and consumers seeking plant-based
proteins, who prioritize the nutritional features of a product (Research Nester, 2023). These
consumers prioritize products with minimal added sugar, fat, and preservatives.
Budget-conscious: These consumers are focused on finding an affordable protein source for
snacks or meals. This segment includes groups such as students and fixed-income retirees, who
fall into the bottom quartile of income, making below $35,000 (Statista, 2022), and the 11.4% of
Americans living below the poverty line (Emily A. Shrider, 2021).

Psychographic Segmentation: (Lifestyle, social status, activities, interests, opinions, attitudes)

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Convenience-seekers: These consumers value portability, ease-of-use, and disposability when

selecting snack foods. They may not shop specifically for peanut butter but will consider it an
option when purchasing groceries or on-the-go snacks. This segment includes consumers such
as travelers and professionals working in an office environment.
Behavioural Segmentation
Heavy users: This segment consumes one or more jar of peanut butter per month on average
(Statista, 2020); these consumers value volume and product availability.
Occasion-based: These consumers purchase peanut butter for special occasions or specific
recipes; they strongly prefer a particular brand and will purchase it each time to maintain the
ritual of the occasion.
Geographic Segmentation
There are no geographic segments for peanut butter within the U.S. because it is a pantry staple
across the country (Research Nester, 2023).
The consumer segments identified above have unique and specific product requirements that
differ from one another; these are summarized in Figure 1.

Figure 1: Consumer Segments – US Peanut Butter Industry

Segmentation Class of Preferences Requirements

customer/type
of customer
Demographic
Psychographic

Behavioral

Or

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Company Apple Bose Bose

(Wearable Audio) (Proposed Market Segment)
Age 18-29 50-64 30-49
Income High-income High-income High-income Mean Annual
Mean Annual Household Mean Annual Household Household Income $100k+
Income $100k+ Income $100k+
Education University/college degree University/college University/college degree
degree
Lifestyle Fashion/beauty Outdoor Activity Movies, TV Shows & Music,
Socializing Financially literate Food & Dining, Travel
Aesthetics Traveling Enthusiast
Buying Regular upgrader (44%) Regular upgrader (49%) Regular upgrader (49%)
Habits New Tech Adopter (19%) New Tech Adopter (24%) New Tech Adopter (24%)
Primary Buying Primary Buying Primary Buying Motivation:
Motivation: Status-seeking Motivation: Quality- Quality-seeking behavior
behavior seeking behavior
Primary Smartphone Smartphone Laptop
Usage Laptop Smartphone
Ecosystem
Brand Strong Low to Moderate Moderate
Interactions
Purchase E-commerce E-commerce In-store
Channel In-store In-store E-commerce
Habits
Values Trendy Traditional Career advancement

Comparative Assessment of Competitive Strategies, Positioning, and Success

Value Proposition US: Apple's key offerings are status symbol and ecosystem integration with other
Apple products. Carrying an Apple product is typically associated with a higher status symbol and most
iPhone users buy AirPods because of the smooth integration with phones, smartwatches, and laptops.
Apple's differentiators include high perceived brand value, seamless ecosystem integration, and superior
after-sales services compared to its competitors. Customers commonly buy AirPods as they have other
Apple products, which helps them smoothly navigate the ecosystem

Value Proposition COMPETITOR: __

Summary statement – Key insight

Key points of differentiation to further establish each company’s position are product features,
pricing, and distribution.

Product Features:

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Apple:
Bose:

Summary statement – Key insight

Price:
Apple:
Bose:

Summary statement – Key insight

Distribution:

Apple:
Bose:

Summary statement – Key insight

Media & advertisement:

Apple:
Bose:

Summary statement – Key insight

SWOT if possible (optional)

Analysis of potential strategies:

After a comprehensive evaluation of the Peanut butter market industry and analysis of the
current trends, it has become evident that Skippy, despite its strengths, is facing fierce
competition from Jif, which holds the mantle of marketing leader in this segment. Moreover,
consumer perception of each brand is a key factor in determining product success.
Following are some options the company can explore:
Product development
Advertising
Customer engagement

_______

Financial Size up
Write about sizeup

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Competitors response to our possible strategy

1 paragraph

_________

Recommendation:
The marketing plan below outlines the anticipated effects the above recommendations on
Skippy's market share and revenue. Analysis indicates that Skippy's market share is likely to
increase by 8% in the first year (assumptions outlined in Exhibit 5) and 13% by the fifth year,
with ongoing implementation of recommendations.

Financial Projections:
Assuming a retail price of $750 and 10 million units sold in 2022, with a $13 million marketing
spend, this recommended marketing strategy is estimated to generate $707 million in incremental
sales in year 1, resulting in a profit margin of $270 million after accounting for COGS and
distribution costs. The MROI is 173.5x and CAC is $1.65. Our proposed recommendations are
expected to increase the current customer lifetime value of high-end Bose customers by 61% to
$656, from the current value of $408. Calculations can be seen in Figure 8 and 9.

Implementation plan:
WRITE IMPLIMENTATION PLAN. HOW WILL YOU CARRY OUT YOUR
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Performance Metrics: (KPI)

Some key metrics Bose should track its progress on, upon the implementation of the plan:

 Higher brand equity: Premium positioning will lead to increased brand equity (brand
perception, quality and desirability).
 Improved brand engagement: More targeted campaigns will improve brand engagement.
 Higher store traffic: Increase store traffic.
 Increased market share: Selling to the right segment will help Bose position itself
uniquely and not only maintain, but also increase its market share.

Risk Analysis
Although the presented plan has cohesive logic, some risks must be highlighted and adequately
mitigated.
The risks are the following:
(a) High barrier to the desired demographic
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(b) Bose’s headphones are already exposed to Apple’s Ecosystem

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(c) The possible high cost of developing a new high-end product.

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