The Common Law Derivative Action in Hong Kong Essay Example

The Common Law Derivative Action in Hong Kong Essay Example The Common Law Derivative Action in Hong Kong Essay The Common Law Derivative Action in Hong Kong Essay School of Accountancy ACY 3151 D– Company Law Preserve The Common Law Derivative Action in Hong Kong Presented to Professor C. K. LOW Submitted by Tony BAI Dongyi; Ashley CHEN Xi; Ri REN Xinyu; Zoe ZHOU Beinan 30 April 2010 Abstract This paper is a response to the First Phase Companies Ordinance Rewrite Consultation Paper Question 7 whether we should abolish the common law derivative action (the CDA) currently retained by sec. 168BC (4) in the amended Companies Ordinance (2004). This paper firstly briefly introduces the current co-existence of the common law derivative action and the statutory derivative action (the SDA) and figure out potential problems which lead us to think about whether we should abolish the CDA. The main part of this paper discusses five arguable aspects from both the con sides and the pro sides of whether abolishing the CDA. This paper discusses the CCASS system which disables many shareholders to use the SDA; the rights f minority shareholders of offshore companies who cannot use the SDA; the international context regarding the CDA in many other common law jurisdictions; the potential confusions and complications with and without the co-existence and some pitfalls of the CDA which are minor and can be ignored. On the discussion of the above five aspects, the authors find that the CDA overrides the SDA in respect of each issue at the current time in Hong Kong, therefore this paper reaches a conclusion that Hong Kong should preserve the CDA at the current stage. Upon the disagreement of the abolishment of the CDA, the authors also provide some further recommendations to help improve the current situations regarding the co-existence of the CDA and the SDA. TABLE OF CONTENTS Abstract2 Table of Contents3 1. Introduction5 1. 1 The Facts of Foss v Harbottle Case5 1. 2 The Rules of Foss v Harbottle Case5 1. 3 The Common Law Derivative Action6 1. 4 The Drawbacks of the Common Law Derivative Action7 1. 5 Introduction of SDA into Companies Ordinance7 1. 6 Problems of the Co-existence of the CDA and the SDA8 2. Five Aspects Regarding the Co-existence of CDA and SDA9 2. 1 The CCASS System9 2. 2 Members of Offshore Companies11 2. 3 The International Context of Derivative Action13 2. 4 Confusions and Complications Arisen without CDA15 2. 4. 1 General Discussion16 2. 4. 2 The MDA May Not Continue to Work17 2. 5 Other Drawbacks of the CDA Can be Ignored at the Current Stage18 3. Hong Kong Should Preserve the CDA19 4. Further Recommendations20 4. 1 Slight Amend sec. 16820 4. 1. 1 Extend the Scope of Qualified Plaintiff of the SDA20 4. 1. 2 Only Keep the CDA for Shareholders of Offshore Companies20 4. Require Offshore Companies to Accept Hong Kong Statue20 4. 3 Similar Legal System in the Region20 5. Conclusions22 Bibliography23 1. Introduction Before we discuss whether we should abolish or preserve the common law derivative action in Hong Kong, we would like to briefly introduce the background of the leading case (Foss v Harbottle) which established the principles of the common law derivative act ion as well as the pitfalls of it. Then we will mention the statutory derivative action which was the statutory regime introduced to deal with these pitfalls of the common law derivative action. At last we present the problems faced by the co-existence of these two derivative actions which lead to this paper’s main topic whether we should abolish or preserve the common law derivative action. 1. 1 The Facts of Foss v Harbottle Case Victorian Park Company was set up to develop parks and gardens. Harbottle was one of the eight promoters of this company. Foss was one shareholder, who brought a law suit alleging that the promoters sold a land to the company at a very high price. But Harbottle argued that Foss, the plaintiff, could not represent the Company to sue the promoters. 1. 2 The Rules of Foss v Harbottle Case[1] The judges in Foss v Harbottle held that the courts should not interfere in the internal management of companies. Because the company is a separate legal entity, if something wrong is done to the company, only the company itself can sue and that is the so called Proper Plaintiff Rule. The effect of this rule is to eliminate vexatious litigation by troublesome minority shareholders. However, the rule was also criticized by many researchers. If the directors of the company do something wrong, they will of course not have the incentive to make the company bring law suits against themselves. Therefore the minority shareholders cannot have the rights to get the wrongdoers to pay remedies to the company and it is to some extent unfair. Due to this reason, later, four exceptions to the rule were established to try to solve this problem. It is held that the Proper Plaintiff Rule will not apply if the relevant transaction ? is ultra vires or illegal; ? requires the sanction of a special majority; ? infringes the personal rights of a shareholder; or ? amounts to a fraud on the minority. 1. 3 The Common Law Derivative Action The exceptions to the Proper Plaintiff Rule in Foss v Harbottle allow the minority shareholders under some limited conditions to sue on behalf of the company. The common law derivative action (the CDA) is applied based on these exceptions. There are two basic requirements for applying the CDA: The alleged wrong or breach of duty cannot be ratified by a simple majority of the members; The alleged wrongdoers are in control of the company, so that the company cannot sue by itself. 1. 4 The Drawbacks of the Common Law Derivative Action Although the exceptions to rules in Foss v Harbottle open a door for the shareholders to take derivative actions, there are still some drawbacks in the CDA which make it not so effective to protect the rights of the minority shareholders. Just like the Australian Senate Standing Committee stated in its Report: Despite a recent tendency towards relaxation, the narrow rules of standing make it difficult for a shareholder to take legal action. There are some obstacles that confront shareholders in bringing litigation in CDA. These obstacles include: ? There are some defects in exceptions to the rule in Foss v Harbottle; ? The expense of litigation is very high; ? It is very difficult for shareholders to obtain information from the company. These drawbacks will be discussed more detailed in later part of this paper. 1. 5 Introduction of SDA into Companies Ordinance Because the CDA have the above pitfalls and cannot adequately protect the rights of the minority shareholders, the SDA was introduced in many common law jurisdictions. For example, SDA was introduced to Singapore and New Zealand in 1993 and Australia in 2001. In Hong Kong, SDA was also written into Companies Ordinance in 2005. Unlike CDA, the court will consider the good faith of the shareholders and the best interests of the company instead of those exceptions to the rule in Foss v Harbottle. In addition, the ratification by a general meeting will not stop the derivative proceedings which mean the hurdle to apply the SDA is relatively lower than that of the CDA. 1. 6 Problems of the Co-existence of the CDA and the SDA Many jurisdictions abolished the CDA after introducing the SDA, for example, Australia, Canada, New Zealand and the UK[2]. But Hong Kong currently reserves the CDA. The co-existence of the CDA and the SDA may cause some problems such as confusions and complications and this was concerned by the Court of Final Appeal in Waddington case in 2008. This directly leads to the Question 7 in the Consultation Paper. In the following session the authors will discuss the potential problems caused by the co-existence and rationally pro ve that indeed these potential problems should not be the reasons to deprive the shareholders of the rights to apply the CDA in Hong Kong because these potential problems are overridden by the benefits brought by the CDA. . Five Aspects Regarding the Co-existence of CDA and SDA In this part the authors will focus on five aspects regarding whether or not abolishing the CDA. In each aspect the authors will compare and analyze both the reasons to abolish and preserve the CDA and rationally prove that the CDA should not be abolished in respect of all the five aspects. 2. 1 The CCASS System Under Section 168BC (Members may bring or intervene in proceedings) (1) of Companies Ordinance, it states clearly that only members of a company can bring a SDA on behalf of company. However, there is no clear requirement whether the plaintiff has to be a member in order to bring a CDA, and the judge is granted discretion to decide. Therefore those shareholders who are not members can still bring a lawsuit on behalf of the company under the CDA. Hong Kong at the current stage still uses the CCASS system for the stock exchange under which the vast majority of shares owned by the public are not held by themselves, but actually held in nominee account which means those shareholders indeed are not registered to be the members of a company even they invest their money and buy shares of that company. 3] Therefore they are not qualified to apply the SDA under sec. 168BC (1). Moreover the nominees who are often huge financial institutions and are custodians of huge numbers of shares from a lot of shareholders may not have the incentive to bring the lawsuit for some minority shareholders. Further even one shareholder wants to suit the directors on behalf of the company ot her directors may not want to do this therefore the nominee may not be authorized to take derivative actions just because one shareholder’s requirement. Then the shareholder may have to withdraw the shares and again deposit them into the CCASS System which is very troublesome in practice and is a waste of money and time. The lag of time is a major concern because it is a great obstacle for the shareholders to take timely action. What is even worse, it is often the case that when the shareholders have the incentive to take such actions the company is already in a difficult financial position and the SFC may block the transaction and register of the shares of the company. Hence the shareholders once withdraw the shares he or she may not be able to deposit them again since the block set up by the SFC. Therefore it is almost very unlikely for a minority shareholder who is not a member of the company to take the statutory derivative action against the directors under the current version of amended Companies Ordinance (2004) and the practical CCASS System. However as stated above the CDA does not strictly require that only members can be qualified to apply. Therefore CDA is a much more feasible proceeding for Hong Kong shareholders than the SDA and actually CDA is almost the only feasible way for the minority shareholders of the listed company to take action (Non-listed companies and private companies do not use the CCASS System to exchange shares). Indeed we observe that from July 15, 2005 when the SDA came into effect most cases applying the SDA are related to private companies which support the opinion the CDA is still very important for shareholders of listed companies. Upon the above discussion the authors reach the conclusion that since the shares of the listed companies are exchanged using the CCASS System and the current SDA is only applicable to members, Hong Kong now should still preserve the CDA. 2. 2 Members of Offshore Companies As will be discussed later in this paper, one of the most important reasons to keep CDA is that it protects the Hong Kong shareholders of companies which are registered outside Hong Kong but have no places of business in Hong Kong in essence offshore companies. However, many people think this is not an effective protection because the procedure is too complicated that it is highly unlikely for small shareholders to take such an action. The right to perform CDA is theoretically feasible but is highly unlikely in reality. Following flow chart shows simply how a shareholder of an oversea company could take action: [pic] First he should go to the Hong Kong court, ideally, get the order. Then the order will be taken to register at a court in Singapore. If that court allows enforcing the Hong Kong order, then they issue another order to enforce it on the company. This might not be the end of the story; the remedy is given to the company, so it is subject to the company’s management’s decision whether to distribute it to the shareholders or not. Again this decision will be made by those directors who are sued in the case and they may not be willing to do so. Therefore this CDA is unlikely to be taken by small shareholders to spend huge cost in exchange of the remedy or no remedy at all. However this cannot constitute the reason to simply abolish the CDA. The CDA is difficult to apply however it is the only way for those shareholders of the offshore companies to protect their rights. To illustrate this section 2 of the Companies Ordinance is reproduced here â€Å"Specified Corporation† means a Hong Kong company or a non-Hong Kong company. (Added 30 of 2004 s. 2)[4] and s168 BC (1) only allows the members of specified corporations to take SDA. As mentioned above, there are a large number of companies (Around 80% according to the HKEX) incorporated outside Hong Kong but with Hong Kong shareholders. It can be inferred that amongst those huge number of companies many have no place of business in Hong Kong, which are neither Hong Kong companies nor non-Hong Kong companies within the definition of specified corporation. Therefore these offshore companies do not qualify under sec. 2 hence sec. 168 BC (1) cannot apply. Analyzing sec. 2 and sec. 168 it is established that shareholders of offshore companies can only apply the CDA because the CDA does not have similar restrictions. The CDA is the only way to help minority shareholders in overseas company therefore Hong Kong should preserve the CDA. The authors recognize that the CDA has high huddle to prove, high costs to incur and complex procedure to apply. However shareholders of offshore companies can only use CDA and we should not deprive the right to use CDA just because that it is complex to use. That is not the purpose of legislation and the spirit of law to develop a fair society. After all, complexity to get the remedies is much better than no way to get the remedies. The CDA can preserve the ability of the members of foreign companies to bring a derivative action in Hong Kong. The rights of these Hong Kong shareholders of such offshore companies to bring a CDA as one more option to defend their own interest may be deprived once CDA is abolished, thus CDA cannot be enforceable in the courts of Hong Kong in any events which is not fair to them. Moreover the existence of CDA also provides a deterrent force to proposed offenders such as offshore companies’ directors seeking for self-interest. 2. 3 The International Context of Derivative Action The judgment given by Ribeiro PJ in the Waddington case might be the most direct fuse for this issue (para. 32)[5]: The co-existence of both the statutory and common law regimes is unusual in an international context and is a source of confusion and complication. It would appear to be appropriate for the statutory regime to replace the common law derivative action altogether. This question deserves to be addressed by the Administration and the Legislature as soon as possible. He addressed that the co-existence is unusual and might raise confusion. This concern is further addressed in the consultation paper. The discussion here then will start with these points in 2. 3 as well as 2. 4 and expand to the inherent weaknesses with CDA in 2. 5. As is mentioned by Ribeiro and the consultation paper, it is unusual in an international context for both the SDA and the CDA to co-exist. So that practices in other jurisdictions where common law applies are reviewed as a reference. Actually, in contrast to Hong Kong, many jurisdictions replaced the CDA after the introduction of SDA. [6] [pic] Take New Zealand as an example, in its s 165(6) Company Act 1993, it regulates: Except as provided in this section (this section refers to section 165 which deals with statutory derivative action), a shareholder is not entitled to bring or intervene in any proceedings in the name of, or on behalf of, a company or a related company. [7] Apparently, the CDA is excluded. However the authors further notice that all above countries are representative ones in terms of developed western countries. The fact that many common law jurisdictions abolish CDA cannot prove the reasonableness of the abolition. This just represents what the situation is in western countries but not represent what we should do in Hong Kong. We should notice that HK has very different economic and political environment as those western jurisdictions and cannot just copy what they do. Thus people cannot suppose this of great value of reference for Hong Kong. Therefore Singapore and Malaysia may be of much more value when considering whether or not abolishing the CDA after introducing the SDA. These three common law jurisdictions have many similarities. All these three are in the Southeast Asia whose economy took off during 1970s and then the structure of the society changed and attention are more focused on developing financial centre and attract more foreign direct investment. Foreign companies are welcomed to be listed in the stock exchanges and local residents get involved in these financial transactions. The economy in these three jurisdictions is now facing similar pressure and the protection of minority shareholders’ is of great importance in order to make the public confident n the financial markets and the economy. Similar stock exchanges, similar financial positions and similar fiscal policies make it valuable to consider what Singapore and Malaysia does in terms of the derivative action when consider the legislation in Hong Kong. Both Singapore and Malaysia preserves CDA after introduction of SDA. Take Singapore as an example it adopted the SDA in its Com panies Bills sec. 216 A and sec. 216 B in 1993 however it still keeps the CDA and only regards the SDA as an addition to the CDA to make the sets of derivative actions complete. [8] Different jurisdictions should consider their own specific situations and only refer to other jurisdictions of the same economy and political situations to establish or revise for the most effective legal system. Regarding to Singapore and Malaysia, as well as the unique situations of Hong Kong to build an international financial centre, the CDA should be preserved at this stage to make sure each investor can be granted sufficient right to protect their investment and make sure that Hong Kong has healthy financial markets and regulated companies’ behaviors. 2. 4 Confusions and Complications Arisen without CDA The second claim made by the CFA in Waddington case is that the co-existence of the SDA and the CDA is a source of confusions and complications. [9] The as was addressed in the Consultation Paper in 2003, the CDA and the SDA differ not only in terms of form, but also in substantive issues. Under SDA, a member could, with leave of court, take the company to the court. According to s168BC (3), grant of leave requires: the action appears prima facie in the interest of the company; a serious question to be tried; the company is actually not acting; and there is a written notice. On the other hand, under CDA, the exceptions to the Foss rule must be proved. Where ultra vires acts, special resolution, infringement of rights, fraud on minority must be proved and satisfied. In addition, the effects of ratification by the board of directors also differ. The most confused part might be that the company is the plaintiff under SDA whilst a defendant under CDA. Some scholar mentioned in his work that: The retention of common law may even create the uncertainty and confusion as to what constitutes the lex fori. [10] Recall that in New Zealand, the CDA is abolished. B. Matthew argued that one of the intentions is to avoid confusion which was raised in an early Canadian case Rogers v Bank of Montreal. : To avoid the uncertainty of whether a derivative action may be brought under the oppression remedy as well as via the statutory leave procedure, and whether the statutory leave requirement acts to the exclusion of actions under one of the exceptions to Foss v Harbottle. [11] However the authors do not regard the above confusions will be sufficient reasons to abolish the CDA. The following are the arguments of some general discussions. 2. 4. 1 General Discussions The co-existence arrangement of the CDA and the SDA has been in place for about 5 years since July 2005, it has not caused any major legal problems. It has never been a source of confusion and complication. Besides, Section 168BC (4) states that the SDA provisions â€Å"shall not affect any common law right of a member of a specified corporation to bring proceedings on behalf of the specified corporation†. 12] In other words, unlike the law in other jurisdictions which abolishes the CDA, the Bill allows the co-existence of the CDA and SDA. This has been done because Hong Kong is unique in the sense that there are a large number of companies incorporated outside Hong Kong, but with Hong Kong shareholders. And there are also safeguards in the Company Ordinance to prevent duplicative CDA and SDA under section 168BE and section 168BC (5) which are reproduced as following. Section 168BE: Where leave has been granted to a member of a pecified corporation under section 168BC(3) and the member, in the exercise of any common law right, subsequently brings proceedings on behalf of the specified corporation in respect of the same cause or matter, or subsequently intervenes in the proceedings in question to which the specified corporation is a party, the court may- (a) order to be struck out or amended any pleading or the indorsement of any writ in the proceedings brought under the common law, or the intervention under the common law, or anything in such pleading or indorsement; and (b) order the proceedings brought under the common law, or the intervention under the common law, to be stayed or dismissed or judgment to be entered accordingly. Section 168BC (5): The court may dismiss an application for leave under subsection (3) if the applicant has, in the exercise of any common law right. [13] This shows that in 2004 when amending the Companies Ordinance, the legislator had ex pressed concern over this problem and tried to avoid confusion. Thirdly, no such confusions regarding which derivative action to use will actually arises because members of private and non listed companies will of course choose the SDA since it is much more convenient and those shareholders of listed companies and offshore companies will of course choose the CDA since they cannot use the SDA therefore we do not see much possibility of confusions arising because of the co-existence. Therefore we should preserve the CDA. 2. 4. 2 The MDA Currently we can take multiple derivative actions (MDA) only under CDA as affirmed by the decision made by Court of Final Appeal in Waddington Ltd v Thomas Chan Chun Hoo. Waddington case introduced a very important way for minority shareholders of the associate to sue the directors of the specific corporation however that case is based on CDA. Although in response to the comments made by the Court of Final Appeal in that case, the extension of SDA to cover MDA has been considered by Standing Committee on Company Law Reform (SCCLR) recently, it has not been really passed yet now. Once we abolish CDA which is the legal basis of MDA Waddington will not longer apply and MDA may come to an end. Therefore that will become a source of confusions as people may wonder whether MDA can be used without the CDA. Therefore the rights of concerned person have to be safeguarded before the legislation of MDA. It is therefore safer to preserve CDA at this stage to protect the rights under the MDA and avoid confusions. 2. 5 Other Drawbacks of the CDA Can be Ignored at the Current Stage Now comes the inherent weaknesses and drawbacks with CDA which can actually be ignored. First, the Foss rule is complicated and instable. Someone even call the Foss rule the deepest mystery of company law. 14] The rule is obscure and outdated. Much of the cases were decided years ago and it’s hard to reconcile all those decided cases. As Parlie Choo mentioned in his work what exactly amounted to a fraud on the minority has been conflicting and difficult. [15] The importance and extent of ratification was unclear And also, the court seems unwilling to get involved with the internal management of companies. [16] Some exemptions are actually hard to be satisfied constitute the second weakness of CDA. Exemptions must be proved under CDA, failing to do so the plaintiff failed the trial. Fraud on minority might be the most representative one. The court will collect shareholders’ opinions as to decide whether fraud exists. In cases where the wrongdoer is also the controlling shareholder, this is extremely difficult to prove. So injustice exists when the wrongdoer got the majority control. The problem is most severe with listed public companies. Thus, CDA easily fails to protect the small shareholders effectively which means it fails the initial purpose of derivative action. Last but not least, in most cases, the costs of the proceedings must be borne by the individual or minority shareholder who commences the action. As we recall from previous, the degree of evidence differs under each scenario. And we make the assumption that the more evidence to be collected the higher cost. Under SDA, the hurdle is actually low and the company may take over the case as well as the cost. However under CDA, the exceptions are very strict requirements and the shareholder is responsible for the case from the beginning to the end. As Dr Y. C. Choong said, under CDA cost can be crippling as they have to show that he has the locus standi (the right) to sue in a preliminary hearing. [17] However as we say above those people can choose the SDA for easy legal proceedings but those people who cannot use the SDA have to use the CDA. And we should not deprive their rights just because that the CDA is relatively complex. Therefore these issues can be regarded as minor issues and should be ignored at the current stage since the Companies Ordinance has not been perfect. 3. Preserve the Common Law Derivative Action in Hong Kong On the balance of the above five issues the authors think that we should preserve the CDA in Hong Kong at the current stage. 4. Further Recommendations 4. 1 Slight amend the Companies Ordinance 4. 1. 1 Option1[18] Abolish the CDA for specified corporations since the shareholders of those companies can use the SDA. Keep the CDA for offshore companies. Furthermore the MDA should be recognized by the Companies Ordinance and base it on the SDA. 4. 1. 1 Option2[19] Extend the SDA to overseas companies and abolish the CDA. any person who, to the satisfaction of the court, has an interest in the relief claimed in the proceedings, whether legal or equitable. [20] Furthermore the MDA should be recognized by the Companies Ordinance and base it on the SDA. 4. 2 Regulate the offshore compani es Hong Kong may amend the Listing Rules to require the offshore companies to sign to accept the regulation of Hong Kong Statue therefore the minority shareholders may be able to sue under the SDA. However even that is the situation the directors may not have the assets in Hong Kong and remedy is still hard to get in practice. Therefore we have the third suggestion which is a similar legal system in the Region 4. 3 Similar law system in the Region Once the law in different jurisdictions becomes much more similar offshore companies are of course regulated and minority shareholders’ rights are well protected because similar legal system in the Region can enhance the cooperation between Hong Kong and neighbor jurisdictions in terms of executing the statue and order granted by the court. Or maybe even better the similar legal system will make Hong Kong court judgments have binding effect on the offshore companies and then in practice the remedy can be got much easily than the current CDA model. 5. Conclusions In this paper we response to the Question 7 of the consultation paper and our answer is we should preserve the CDA currently. We consider five aspects and rationally prove that the CDA should be preserved in respect of each aspect. Although the authors prefer to preserve the CDA, further suggestions are also provided for future improvement of some current practical weaknesses in terms of derivative action in Hong Kong. References The statutory derivative action: now showing near you, Paul von Nessen S. H. Goo Chee Keong Low, 2008, Journal of Business Law Griggs, L. (2002). A Statutory Derivative Action: Lessons That May Be Learnt From its Past. Retrieved April 2010, from Australasian Legal Information Institute: austlii. edu. au/au/journals/UWSLRev/2002/4. html Li, X. (2006). nbsp;

Top 10 Obsolete Grammar Rules - by Guest Blogger Steven Sawyer

Top 10 Obsolete Grammar Rules - by Guest Blogger Steven Sawyer Article by Steven Sawyer. Edited by Brenda Bernstein, The Essay Expert Following The Essay Expert’s post about using the â€Å"singular they,† some writers in one of my LinkedIn groups were talking about breaking English grammar rules. Several of us spent a few hours discussing the merits, or de-merits, of using â€Å"they† as a singular pronoun. We were essentially divided into two camps:   purists, who would never break a time-honored English grammar rule, and progressives, who know all the rules – and delight in breaking them.   By the end of the heated discussion, purists were still purists and progressives remained progressive. Purists love the predictability of our language and the grammar rules that govern it. They still remember how to diagram a sentence.   They can spot a dangling modifier at 50 yards and pick out a subject-verb agreement error faster than you can say â€Å"comma splice.† If you went to their houses you might find that they iron their underwear and alphabetize the canned foods in their pantry. (I know a couple of purists who do that.) Progressives, on the other hand, believe that breaking rules connects writers with the masses, who stopped thinking about grammar rules decades ago. (If you dont believe me just ask any passerby to locate the verb in a sentence.) Just last year, a group of Ivy League English language purists lobbied to have â€Å"Thou shalt not break English grammar rules† added as the 11th commandment. But language mavens, dictionary writers and even influential linguists are relaxing many writing standards. Some experts are equating this usage shift to the Great Vowel Shift that took place in England in the 15th century. So, my Purist grammar friends, what will you do? Will you suck it up and go with the changes in the language as they evolve?   Or are you determined to maintain pristine prose? Its really okay if purists remain purists. I believe theyll dwindle over time until they become an extinct species, but they do have their place in our culture today. Purists, heres what youre going to have to swallow if you want to keep pace with our ever changing language. Top 10 Obsolete Or Seldom Enforced Grammar Rules Don’t split infinitives. Who would want to shamelessly do that anyway? Active voice verbs are preferable to passive voice verbs. I will never part with this one. I have  encrypted  this rule in my memory’s hard drive. Passive voice will forever be stricken from my writing. That makes me a purist for this rule only. Never start a sentence with â€Å"And† or â€Å"But.† And why not? It gets easier every time you do it. See 5th paragraph, second sentence. Never start a sentence with â€Å"There is† or â€Å"There are.† There are many occasions when starting a sentence with â€Å"There is† or â€Å"There are† is perfectly acceptable. Boring, perhaps, but acceptable. E.g., There is more Canadian bacon in the United States than in Canada. It would be difficult to change the wording in that sentence without starting with â€Å"There is†. Never end a sentence with a preposition. Now that’s a rule we can all live without. Always use â€Å"more than† instead of â€Å"over† with numbers. Okay. Whatever. Math’s not my gig. But truly, either one is acceptable use today. So, purists, get over it. Data is plural, so the verb must always be plural. So data is what data does? Or data are what data do? If they say so. Anyone with a good ear for English knows the answer to this one. Don’t start a sentence with â€Å"This.† The grammar gurus now say that you can start a sentence with â€Å"This.†Ã‚   But (Ooops, there I go, breaking rule 3. See how easy that was?)   I believe that [practice] is okay and this [guideline] is perfectly acceptable. Don’t use â€Å"free† as an adjective.   E.g., â€Å"Can I get that laptop free?†Ã‚   Nay, nay, writing comrades. That’s purist speak. Feel free to use â€Å"for free.† E.g., â€Å"Can I get that laptop for free?† Don’t use â€Å"fun† as an adjective.   You purists make me giddy.   You’ve always used â€Å"fun† as a noun.   E.g., â€Å"We had fun at the game today.† But we progressives like to use it as an adjective. â€Å"It was a fun weekend reunion with my family.† English is an evolving language. A new word gets added to the language every 98 minutes, according to the Global Language Monitor. That’s 14.7 words per day.   As words get added, usage rules undergo changes as well. Will you adopt the new â€Å"rules† of grammar? Your answer determines which camp you’re in. Steven Sawyer is a blogger, author, editor and online English teacher and writing consultant.   Read his blog at https://stevensawyer.wordpress.com/. Category:Grammar Writing TipsBy Brenda BernsteinMay 15, 2011 14 Comments Penelope J. says: May 18, 2011 at 4:28 pm The above post on progressives vs. purists was both fun and enlightening. I agree that in some cases, we have to be open to change rather than stick to the more correct language usage. I agree with the above comment. Using Where you at? and got instead of have (or in many cases, buy) have become widely acceptable, but I cringe every time I hear them uttered. Things like/such as What you got? really get (to) me. Anyway, what does get to me actually mean? Also, using a word to express the opposite feeling, You kill me or Thats a killer has become the norm rather than the exception and is taken to excruciating heights on programs that my grandchildren watch such as American Idol. But the English language is evolving and devolving to such an extent that, at 14.7 new words a day, purists must be having a hard time making or expecting others to stick to the rules. However, is it too much to ask that some rules not be broken such as misuse of verb tense and pronouns? Log in to Reply The Essay Expert says: May 31, 2011 at 11:45 am Penelope, Im so glad you mentioned Where you at! When living in Brooklyn, if I were asking for directions on the street I would always say Do you know where such-and-such street is at? Im also guilty of using got instead of have. Its funny the things that still bug me, vs. the things Ive adopted. Im sure these things differ for each of us. Fun as an adjective still grates on my nerves. And I dont think its too much to ask to keep some rules in place but whos to decide which ones? I certainly have my opinions! Log in to Reply The Essay Expert says: May 31, 2011 at 12:00 pm Thanks Lynn. We all have our own pet peeves dont we? Mine are different from yours! (And lets not even start on different from/different than.) I have articles on its/its and lose/loose which I invite you to read and share! https://theessayexpert.com/blog/2011/05/31/the-day-my-dad-didnt-make-it-home-from-work-by-marianne-worley-business-writing-consultant-at-the-essay-expert/ and https://theessayexpert.com/blog/2009/09/13/common-spelling-mistakes-lose-vs-loose/ respectively. Log in to Reply The Essay Expert says: June 13, 2011 at 3:57 pm Thanks for your comment Rick. I agree! Log in to Reply Marion Suarez says: June 3, 2012 at 1:29 pm I feel as though proper usage of fewer/ less is almost entirely obsolete. I cant find anyone who still understands the distinction or honors it. Log in to Reply The Essay Expert says: June 3, 2012 at 3:34 pm Thanks for your comment Marion. Its funny, I see 10 Items or Fewer now in many grocery stores, and I almost want them to change it back to the wrong way! Log in to Reply Mary Kent says: August 30, 2016 at 12:25 am Should we follow the rules regarding using the possessive form of nouns and pronouns with gerunds or is it a truly lost cause? Log in to Reply Brenda Bernstein says: September 2, 2016 at 10:20 pm Great question Mary! Ive been fighting for this one since I learned the rule at the age of eight. Im terrified by the number of times people correct me on this point when I am using correct grammar! Log in to Reply John T Mon says: August 7, 2017 at 11:02 pm Im mid-60s and I always wonder what happened to the use of A and An? Log in to Reply Brenda Bernstein says: August 8, 2017 at 6:55 am Do mean in spoken speech, John? It does seem like a lot of people say a when an would be grammatically correct. Log in to Reply Rebecca says: June 4, 2018 at 11:43 am I’m not a pure purist! Quirky, and especially regional, â€Å"impurities† make such entertaining conversation and writing. Still, why has the subjective compound pronoun become so accepted when used in the objective case? In speaking, I realize we all get tripped up, but I’ve seen it in writing and heard it from journalists. Log in to Reply Brenda Bernstein says: June 4, 2018 at 1:15 pm I’m right there with you, Becky. Drives me up a wall and the correct grammar seems so logical. Thanks for your comment! Log in to Reply Susan says: June 29, 2019 at 6:50 am The increased misuse of I and me when referring to another person and oneself is my beef. I am now hearing even professional speakers such as news announcers, pastors, etc. making statements such as, The taxi picked up my friend and I. In fact, I came across this article when again doing a search to see if this rule has changed. Log in to Reply Brenda Bernstein says: June 29, 2019 at 10:05 am Im with you, Susan. What did you find? Anyone saying the rule has changed? I think its more that very few people understand correct usage. Log in to Reply

The Epistmology of Conspiracy Theories Essay Example | Topics and Well Written Essays - 1250 words

The Epistmology of Conspiracy Theories - Essay Example What exists about such events is only fantasizing of what might have been the cause. There are various such conspiracies in the world. The first one concerns the source of Human Immunodeficiency Virus that causes Acquired Immune Deficiency Syndrome. People speculate that it was a product of Soviet or American biological warfare and that it was released either with or without the knowledge of the scientist who made it. People were also not aware that such virus existed. The second conspiracy concerns extraterrestrials that frequently visited the earth with the intention of killing cows and human beings. The memories of these individuals and animals are then erased from our memories such that forget them forever (Keeley 6). The third conspiracy explains that there once had a good transport system in Los Angeles city which was made up of street cars. In 1930 to 1940, car manufactures, rubber makers and oil marketers formed a conspiracy group that distracted this transport system. The in tention of the group was to turn the city’s transport system into an automobile type. It, therefore, made large sales by selling such automobiles. The fourth conspiracy is that of â€Å"Trans World Airlines Flight 800.† The plane was accidentally sunk into the sea by a United State navy missile. The government then covered the facts behind this accident by refusing to release the right information to them media. These were just the mere speculations that went around in the public. The sixth most common conspiracy is the most surprising one. The United State is said to record all telephone calls made by people living in Transatlantic. The National Security Agency was the body behind this monitoring and recording (Keeley 8). Their primary intention is still yet to be known. The fifth conspiracy speculates that a small group of Jewish bankers controls the world economy. Other groups that were speculated were the Trilateral Commission and Freemasons. The sixth and the most talked about conspiracy involve the Oklahoma City bombing. It is speculated that a police officer guarding the main entrance of the building had in the previous days killed a person. His friends swore to revenge by throwing a bomb at him. They did so and killed the officer together with an extra 168 people. A clear analysis of the Oklahoma City bombing can reveal some characteristics of a conspiracy theory. After the bombing, news went around that the Bureau of Alcohol, Tobacco and Firearms had been forewarned before it took place, which they denied. A wise person should understand that such speculations or news in the media may be false or true. However, a conspiracy can be identified by a number of characteristics (Keeley 10). First, it offers the clarification of the event in question. The aim of this clarification is to confuse people’s minds and distract them far away from the truth. The second characteristic is that the people behind the bad event are revealed as weak and not capable of doing such an event. They are revealed to have played a helping role. They are seen as setting the main event that caused the disaster. Third, the group that does wrong or harmful event must be small in number. Other larger groups of people whom they are acting for, is largely hidden. Fourth, they cast doubts on an official story that had been earlier released. It, therefore, acts as a cover

Media analysis Research Paper Example | Topics and Well Written Essays - 1250 words

Media analysis - Research Paper Example The growth in international tourism and travel has led to the reliance on food experience as a way of marketing destinations. This extends gastronomy across all socio-economic societies. In recent years, gastronomy has changed a lot especially with the effects of media into the marketing strategies. There exist a lot of media forms through which information about food can be passed (Radin, 2006). Different types of food and beverage products have been advertised using various forms of media. Modern day marketing techniques target specific groups of people, and there is a need to identify the best channels to reach the target market. In Sydney, there are many food outlets offering different cuisine. These food outlets range from fast foods to restaurants selling meals containing several courses. These establishments differ in the way they choose their markets. The marketing strategies, however, seem the same. They use the same media approach to reach their targets in different ways. M cDonalds can be identified as one of the leading hotel chains within Australia. They tend to use advertising through television more than other outlets like donut king. Within the Richmond neighborhood of Sydney, these two chains each have an outlet. They tend to compete for the same clients who consume fast food (McGrath & Anderson 1986). Their target market comprises of mainly youthful city dwellers. This client target does not have the time to prepare meals in their homes. This reason makes the two outlets identify t is group as their target market. The organizations have each been able to cut a niche for itself within the same market (McIntosh et al, 1995). McDonalds specializes in American cuisines while donut king does not have a cuisine specialty. Thought they don’t deal with the same products, they deal with similar ones. It would be difficult for donut king to start selling American food to outshine McDonalds. The two establishments have been using television a lot t o advertise their products. They have also put up billboards in certain strategic positions to aid in advertising. McDonald runs special adverts aimed at creating awareness on the importance of having a snack in between meals. This aims at making the same individuals realize that the snack being recommended can be acquired at their out let easily. On the other hand, donut king uses the same media to promote the new products which they have (Warde 2009). The advertisements run by McDonalds can be classified as informatory. The restaurant already has an international recognition. It lacks the reason for engaging in product familiarization advertisement. Being an international brand, the McDonalds outlet in Richmond, needs to let its presence felt. The use of television has been most effective for these two establishments. The target market of youth spends a lot of their time glued to television sets. Advertising on TV ensures that the targeted client receives the information quickly a nd easily (Chen, 2004). These advertisements normally run on the cable networks due to the popularity of these networks with the youth. The use of television ensures information reaches the highest number of people in the shortest time possible. Most establishments put a lot of emphasis on advertising as a way of marketing their products. Though essential in the promotion of a product, advertising should not be the only way of marketing (Michael & George 2004). Introduction of unique products

Economics at the University of Pennsylvania Essay Example for Free

Economics at the University of Pennsylvania Essay Although I want to major in Economics at the University of Pennsylvania, I have a passion for poetry and prose, and I would love more than anything to develop my writing skills in Penn’s School of Arts and Sciences. That program provides the disciplined and distinguished qualities that I seek. One must be a great reader before becoming a great writer, so I indulge in books of every genre to expand my range of knowledge. Literature brings me great joy, and I will strive to integrate my fondness for reading and writing into my college experience. Penn’s English Department is unique in that it provides the opportunity for students to place an emphasis on studies in creative writing. Within that framework, I want to channel my passion for poetry into academia. As founder and president of Shandong Normal University Literature Association, if accepted, I plan to visit the Kelly Writers House religiously as a way to satisfy my perpetual craving for remarkable literature. I envision myself grabbing a turkey and cheese sandwich with no mayonnaise at the 1920 Commons, then rushing off to the Kelly Writers House with an armful of books by Maya Angelou and Eric Schlosser. Gathered in a tight circle of chairs, I want to share professional works with fellow literature lovers. We will offer our own daring lines of free verse, swap suggestions, compliments, and light-hearted laughs. During workshops, my very soul seeps steadily through an invisible tube from brain to ballpoint. This complex phenomenon of input-output produces painstakingly arranged ink on paper, a painting made of letters. On my way to a morning class on modern American poetry, I will pass Oldenberg’s famed Split Button and acknowledge Mr. Franklin sitting upright in his chair. After the lecture, I can envision Professor Josephine Park and I conducting research by analyzing the influence of conflicts between America and East Asia on Asian-American texts. As part of the Penn family, I will converse with colleagues, sisters, and brothers that destiny forgot to recognize. Then, I will tutor secondary school students about reading and writing through the outreach program. Having been featured in a myriad of written works and publishing my own collections, I will roll up my sleeves and organize literary pieces in the weekly undergraduate magazine, First Call. As evening emerges, I will bike to the Van Pelt Library, work comfortably in my favorite armchair, and complete the finishing touches on a Second World War paper. Traveling to other parts of the City of Brotherly Love, study group friends and I will order a few Philly Cheesesteaks from Pat’s King of Steaks for dinner. My roommate, with lips coated in frothy toothpaste, will open the door when I get back. After taking a shower, I will dry my hair on a blue polka dot towel, sit on my bed, and chortle cheerfully while my roommate chatters about the highlights of her day. Then I will read an article about the Penn Museum from The Daily Pennsylvanian. After turning off the lights and setting my alarm clock for 6:00am, I will drape my jogging shorts and shirt on a chair for the morning. Before drifting off to sleep, I will fondly recall submitting my application to Penn, and smile in the quiet of my room, happy to be here at last.

Comparison Certified Nursing Assistants versus Licensed Practical Nurse

Comparison Why would anyone be in the healthcare field? First, there are different types of positions available. Second, this is a very rewarding career for those who enjoy caring for others. Although, most people think there are a lot of differences between certified nursing assistants and licensed practical nurses, they share the same type of work, working conditions and job outlook. The nature of the work is very similar for the C.N.A. and L.P.N. A C.N.A. work includes performing routine tasks under the supervision of nursing staff. They answer call bells, deliver messages, serve meals, make beds, and help patients eat, dress, and bathe. Aides also provide skin care to patients, take pulse, temperature, respiration, and blood pressure and help patients get in and out of bed and walk. They also escort patients to operating rooms, exam rooms, keep patient rooms neat, set up equipment, or store and move supplies. Aides observe patient’s physical, mental, and emotional condition and report any change to the R.N. Likewise the L.P.N. provides basic bedside care. They take vital signs such as temperature, blood pressure, restorations, and pulse. They also treat bedsores, prepare and give injections and enemas, apply dressings, apply ice packs and insert catheters. L.P.N.’s observe patients and report adverse reactions to medications or treatments to the R .N. or the doctor. They help patients with bathing, dressing, and personal hygiene, and care for their emotional needs. ...

Peanut Butter in Germany

Jif Peanut Butter in Germany [pic] Man cannot live by bread alone. He must have peanut butter. – Bill Cosby Part 1: Executive Summary In order to maximize profit, J. M. Smucker could increase sales of Jif peanut butter, its best selling product, into growing markets. Prior to any expansion a full analysis of the market is necessary. The country with the largest market potential for peanut butter in Europe is Germany (ibid 79). The country climate of Germany gives a positive outlook for peanut butter, the primary option being as a breakfast option in the bread spread category. Daily patterns are malleable to suggest that peanut butter be a component, an additive, an ingredient, or a snack. Jif as a stand-alone brand is a U. S. -based product that has never, through company initiative, introduced any of their products internationally. Therefore there is no past experience in new market expansion. Jif has the branding business model. One main question is whether to copy the previous model for new entry (acquisition) or develop a new strategy that will better align with the targeted market. The target market for Jif in its home market of the US is families with children with the slogan â€Å"Choosy moms choose Jif. Based on the 360 degree profile of customer segments in Germany, the segments were evaluated on margin, persuasion, and volume potential. It was determined that the target market will also be families with children in Germany. Although the target market is the same, Jif will have a very different problem in Germany, getting users to switch to pean ut butter instead of Nutella and recognizing alternative uses. In comparison, the primary marketing challenge in the U. S. is getting users to switch from another peanut butter brand to Jif. The following report found multiple challenges of introducing Jif to a new market, including multiple points of resistance from the target market, such as: association of peanut butter with fatty American foods, current use is only as a bread spread, and entrenched competitors in the bread spread category such as Nutella and Ultje. Peanut butter is more nutritious than the leading bread spread. Peanut butter is high in monounsaturated fats, which actually reduce cholesterol. Peanut butter is also a good source of protein for vegetarians and vegans and is gluten-free and kosher. Therefore, the points of resistance can be addressed by clearly communicating the nutritional benefits of peanut butter as well as alternative uses. Options for alternative uses of peanut butter include integrating peanut butter as an ingredient in cooking. The communication of alternative uses could be through recipes. The main competition is in substitutes. Although it is identified as a substitute rather than a direct competitor, Nutella, a chocolate hazelnut spread, will be Jif’s primary competition in the German market. Holding 17% of the market share, Nutella is the number one choice of bread spreads. Peanut butter is currently not a large competitor in Germany in the bread spread category, as evidenced by its 1% market share. As a direct competitor, Ultje will present the most aggressive barriers to Jif’s entry. Ultje is a company that has been present for a long time, is locally based, and has a presence in the market due to its well-recognized cartoon figure, jingle, and celebrity endorsements. To combat both competitors the campaign should suggest peanut butter as a complement to the Nutella product. Selecting distributors and developing relationships with value chain members is also a challenge. There are several wholesalers of peanut butter in Germany, which can be used to distribute peanut butter to retailers where consumers can then purchase the product. In conclusion, while the German market has high potential, it will be a difficult venture into Germany. If the decision is to enter the market some changes will need to be made, but the basic business branding model will remain the same as in the U. S. Jif will have to be keenly aware of how their brand – their marketing message, tagline, jingle, label packaging, etc. – is perceived in the German market. Part 2: Company Background Jif’s flagship creamy peanut butter spread was first introduced in 1958. Since 1981, Jif has been the leading peanut butter brand in the United States. As of 1998, Jif had an estimated 42. 5% of the market share, dwarfing closest competitor Skippy at 28. 8% (Marigny 99). In 2002, The J. M. Smucker Company purchased the Jif brand from Proctor and Gamble. The purchase of the largest peanut butter brand in the U. S. by the famous jelly manufacturer was likely a strategic move to streamline distribution of the complementary products. Peanut butter is sold primarily as a bread spread, and secondarily as an ingredient for other meals. The distribution of peanut butter is about 70% creamy to 30% crunchy (Kellogg). In 2005, peanut butter had a U. S. household penetration rate of 93%, with an even higher percentage in households with children (see Exhibit 2A). Jif has historically averaged near 40% of the market share (Kellogg). Business Model. Branding is very important to Jif, and their branding efforts have been consistent over the years. Jif’s marketing program has been primarily family focused, with the popular tagline â€Å"Choosy Moms Choose Jif. † Also notable is brand-building of the widely recognizable Jif label, with its striking vertical bars in basic red, blue, and green. As an instantly-recognizable brand, Jif has enjoyed long-term customer loyalty. Jif’s brand portfolio includes the core brand – the original creamy spread – along with newer varieties such as Extra Crunchy, Reduced Fat, Natural, Simply Jif, Jif Omega-3, Peanut Butter & Honey, as well as complementary products such as to-go miniature containers (Jif website). The stage of business development in this market is very mature, and the competitive landscape is quite saturated. As a result, Jif does not emphasize margins, as their price is set very competitively. Rather, Jif emphasizes increasing volume among existing customers in two ways. First, they encourage increasing the quantity of product purchased by offering multiple varieties. Cannot decide between creamy or crunchy, omega-3 or reduced fat? Try one of each! Secondly, they encourage increasing the volume of product purchased by creating new uses and purchase occasions. Jif’s website is replete with recipes and serving suggestions, including an array of international dinners from Senegalese Beef Peanut Butter Stew to Mexican Chicken Peanut Mole. You can even sign up to have Jif recipes delivered to your Yahoo or Google page via RSS feed, downloaded to your iPod, or sent newsletter-style to your email. A final strategy to increase volume as well as exposure to the brand is an annual contest called the â€Å"Jif Most Creative Peanut Butter Sandwich Contest. † The winner receives a $25,000 dollar scholarship fund. The event draws a multitude of families and local media (Jif website). Target Market. Jif’s advertisements, tagline, and website clearly target mothers of young children. Jif’s label and homepage both boast an icon saying it is the â€Å"#1 Choice of Choosy Moms†, and the website includes a prominent link to a â€Å"Mom Advisor† page. Recently, Jif toyed with a more politically correct tagline, briefly updating it to â€Å"Choosy Moms, and Dads, Choose Jif†. In a comparison study with other leading brands, Jif’s consumers are clearly mothers or parents in the 35-44 year-old age range, and tend to be employed part-time in non-professional roles (see Exhibit 2B). Notably, the primary indicator of peanut butter purchasing for all three of the top brands is having a household of 5 or more people. Having kids age 2-5 is the second strongest indicator for Jif (Marigny 221). â€Å"Marketers have historically targeted children and their mothers in product advertising, and even the names of the major brands are childlike—Jif, Peter Pan, Skippy† (ibid 33). See Exhibit 2C for a 360-degree profile of common consumer segments, showing the â€Å"housewives† category as having the highest persuasion potential with Jif’s existing position in the U. S. market. Value Proposition. Jif creates value for their customers – the choosy moms segment – by assuring them that they are â€Å"America’s favorite peanut butter† because of their â€Å"fresh-roasted peanut taste. † This proposition allows busy moms to know that their choice at the supermarket is an easy one; it doesn’t require a lot of time or effort, and they will be satisfied with their purchase time and again. Secondarily, since this segment values healthful meals and having family dinner together, value is also created by providing creative recipes via RSS feed or email as described earlier. Strategy, Marketing Program and Positioning. Jif’s main competitors are Unilever’s Skippy and ConAgra’s Peter Pan, accounting for 60% of the category, plus a variety of private-label brands (Kellogg). Jif has several points-of-parity with their main competitors, namely in product attributes, price, and physical placement. All three companies offer similar varieties of peanut butter, similar sizes, and similar prices. They also have similar marketing techniques, mainly television ads featuring children shown during daytime programming. In the U. S. , peanut butter is firmly positioned in supermarkets, accounting for 95% of sales. Mass merchandisers (such as Costco and restaurant suppliers) make up another 4% (Marigny 199). Peanut butters are almost always positioned on the shelf next to complementary products such as jelly and honey. The companies do maintain points-of-difference, however, mainly in their positioning as described below. Skippy, the #2 brand in the U. S. , has traditionally positioned itself as the wholesome, healthful brand. Skippy has emphasized peanut butter’s high protein content more than the other brands, and has used celebrity endorsements such as former Mouseketeer Annette Funicello and athlete Derek Jeter (Gidman). Skippy claims to have less sugar than other brands, and in 1990 attempted to convince adults of the health benefits of peanut butter, using fresh vegetables and other foods in its advertising – which resulted in a dramatic decrease in market share. Since 1990 Skippy has repositioned itself as the â€Å"best testing peanut butter† (Kellogg). Today, Skippy’s website (with the enviable peanutbutter. com URL) is clearly kid-focused, with games, cartoons, and a â€Å"Kid’s Corner. † Skippy is also the highest-price per oz brand of the three- they package in the smallest container size at 16. 3 ounces. Peter Pan is positioned as the low-price brand. Advertising and information on their website is skimpy, and the company appears to prefer to â€Å"comfortably coast along in its third-place standing† (Gidman). In the past, Peter Pan has attempted to target kids, then adult non-users, and has also claimed to be â€Å"the best tasting peanut butter† (Kellogg). Peter Pan is the only brand in the top three to have been actually recalled by the FDA due to salmonella poisoning. Jif’s main point-of-difference from competitors is their obvious appeal to mothers as the target audience. As we have described, the tagline â€Å"Choosy Moms Choose Jif,† the company’s marketing efforts (recipes, contests, etc. , and the website are very much geared toward mothers with young children. After competing head-to-head throughout the 1980s and 1990s on which brand is the best-tasting, Jif has settled on a subtle yet specific difference: it has more of a â€Å"fresh roasted peanut taste. † Jif is also the large st advertiser of the three, but doesn’t use consumer promotions as much as their competitors. Although Jif has been able to claim the #1 spot since 1981, it maintains a price point below Skippy. They have also taken a swipe at Skippy by pointing out the difference in product sizes on their label, â€Å"We’re Still 18 oz. Refer to Exhibit 2D for a product positioning map. Part 3: Company Analysis Company’s capability in entering new market. Jif as a stand-alone brand is a U. S. -based product that has never, through company initiative, introduced any of their products internationally. So taking their peanut butter to Germany will be a first time experience for Jif. Therefore, the only predictability we can use here is that of the mother company: The J. M. Smucker Company. From their history, Smucker’s has penetrated various food industries in Canada, mostly through acquisition. None of these acquisitions were peanut butter related. So as they are preparing to enter Germany with one of their most popular brands, Jif peanut butter, the main question remains whether to copy the previous model for new entry (acquisition) or develop a new strategy that will better align with the targeted market. In order to assess the company’s capabilities in entering the German market with peanut butter, it is important to note that the Germans in their traditional cuisine do not use peanut butter. In Germany as in many other parts of the world, peanut butter is considered â€Å"an unpalatable American curiosity† (Kellogg). With the emerging immigrant population in Germany, the use of peanut butter has slowly established itself over the years, although the growth rate since 2004 has remained relatively stagnant  (see Exhibit 3A). But based on another study of the market in Europe, Germany has the largest potential market for peanut butter (see Exhibit 3B). One challenge in entering Germany for Smucker's Jif is a general reluctance to use American products as they are seen as high in fat (Avini). However, based on the Cultural Navigator, Germans use facts and empirical data in the decision making process and expert opinion plays a major role. In this regard, Jif may be able to enter the German market by emphasizing facts such as the nutritional benefits of their product line. Identification of business model. Since there are some very specific points of resistance in the German consumers’ perception of peanut butter, Jif’s primary responsibility will be to build brand awareness and break the points of resistance with effective communication. Jif will have to be keenly aware of how their brand – their marketing message, tagline, jingle, label packaging, etc. – is perceived in the German market. While some changes will need to be made to enter the German market, the basic business model will remain the same as in the U. S. for Jif. Core competency, activity management, innovation, and relationship management are also important to the company, but what they must absolutely positively get right is their branding. Controlling the largest domestic market share in the U. S. has enabled the company to guarantee some level of profitability through the years; not to mention their effort to always drive an increase in sales volume through programs that keep the Jif brand alive in the mind of their customers. Looking at the German peanut butter market today, it is clear that the sales volume and values have slightly decreased since 2008 (see Exhibit 3C). With volume potential as a main component in the profit impact equation, Jif in today’s German peanut butter market may have a hard time achieving market share and thus profitability. Therefore, increasing the overall nut-based market share (which increases the sales volume as well) will be necessary to ensure sustainable growth in that new market. Exhibit 3C also shows that the spread market share is large enough to provide a good market to Jif if the right marketing strategy is applied. In considering Jif’s aggressiveness in attacking the U. S. market today, it will be a good tool for them in the German market where there is large potential to tap into the competitor's market. Another avenue using the current market share may be to explore Blue Ocean that will result in lowering variable cost and may increase the sales volume; because considering increasing price to a market that is stagnant will only force the market to decrease. The success of penetrating the German peanut butter market will be very much dependent on the marketing/advertising program that is associated with it. Part 4: Customer Analysis Identification and 360-degree profile of customer segments. Segments of food consumption analyzed: young families with children, young families without children, seniors, young singles, restaurants, and hotels. A 360-Degree Profile was then performed for these segments with regard to Demographics, Psychographics, and Product Usage. Demographics: |Young Families |Young Families with No |Young Singles |Seniors | | |with Children |Children | | | |Barney’s Best |Bulk import |creamy or crunchy peanut|Company has very little information online |Depends on grocery store outlet | | | |butter | | | |Ultje |Premium |creamy, crunchy, or |Aggressive marketing, including pop |Pictures show these in a | | | |low-fat peanut butter |star/celebrity endorsements; promoted as |non-prominent position next to | | | | |heal thful, quality snack; company is |marshmallow fluff, applesauce, | | | | |promoted as an innovative expert in |etc. | | | | |nut-based snacks | |Algood Food Company|Bulk export |creamy or crunchy peanut|Company promoted as an expert: â€Å"Forgive us,|Depends on grocery store outlet | | | |butter, includes |but peanuts are our bread and butter† | | | | |specialty items such as | | | | | |No-Stir Natural and PB &| | | | | |J Stripe | | | |Calve Pindakaas |$5. 49 |creamy peanut butter |Product promoted as healthful and specialty|Only available online | |Rinatura |2. 9 EUR |organic peanut butter |Promoted as all-natural, organic, the |Elaborate displays of all types | | | | |choice for health-conscious consumers |of products from this company – | | | | | |peanut butter is one of many – | | | | | |all products have matching labels| |REWE/PENNY |â€Å"discount store |organic peanut butter |REWE has a corner on the market since they |â€Å"PENNY will display the org anic | | |pricing† | |own a large chain of grocery stores; |foods side-by-side with their | | | | |obviously their label will get prominent |counterparts from conventional | | | | |display and marketing |production. This will direct the | | | | | |attention of PENNY customers to | | | | | |ecological alternative products | | | | | |and new items in a targeted | | | | | |fashion. † | |Other private-label|3. 59 EUR (see |varies |varies |Pictures show these in a | | |Exhibit 5E) | | |non-prominent position next to | | | | | |marshmallow fluff, applesauce, | | | | | |etc. | |Nutella |1. 95-2. 9 Euro for|Chocolate-hazelnut |Promoted as â€Å"part of healthy breakfast† |Depends on grocery store outlet | | |400g |spread |targeted at children; sold in glass jars | | | | | |which can also be used for drinking; hosts | | | | | |an interactive online community | | | | | |(http://www. nutellaville. it/); sells | | | | | |t-shirts and other promotional products | | Positioning of competitors’ product/brand. Within the nut-based spreads subsector, the competitive landscape is not highly differentiated. Products have a similar price and position. In order to penetrate the market, however, J if will need to consider the broader-based spreads sector, which includes peanut butters alongside Nutella, honeys, jams, etc. See Exhibit 5F for these product positioning maps. As we have discussed, Jif will have to re-position peanut butter to be as useful in consumers’ minds as the better-selling spreads. Assessment of industry attractiveness and competitors’ strengths and weaknesses. The worldwide market potential of peanut butter in Germany is the largest in Europe. At the same time, sales and profits are declining. We attribute that to a lack of wide acceptance of the product, rather than being in the late-maturity stage of the product lifecycle. There are plenty of competitors in the nut-based spreads market, yet the market is not saturated. Of the competitors present, we believe Ultje will present the most aggressive barriers to Jif’s entry. Ultje is a company that has been present for a long time, is locally-based, and has a presence in the market due to its well-recognized cartoon figure, jingle, and celebrity endorsements. A review of online opinion polls, blogs, expatriates and former German nationals now living in the U. S. shows that of the products available locally, such as Ultje, none taste quite the same as that good old-fashioned American peanut butter. We are tasked with bringing the American taste and texture, but not the American image, since German consumers have a general reluctance to use American products. Part of the marketing challenge will be to dispel the myth that peanut butter is fatty; being high in monounsaturated fat actually reduces cholesterol. We will also need to remove the emphasis on being an American company and instead focus on creating a German image using local scenes and labeling. As we have learned, Germans use facts and empirical data in the decision making process, so we believe the right marketing and communication effort will succeed in overcoming these challenges. We believe the biggest competition will come from Ferrero’s Nutella, a chocolate-based spread or a â€Å"substitute† product, rather than other peanut butter spreads directly. Again, this indicates a lack of acceptance of peanut butter on its own merits – something Jif, with the right marketing plan, can correct. Part 6: Channel Analysis It is important to select channel partners that provide value to the relationship, which can be done through devoting resources to marketing Jif or helping to create a competitive difference. It is important that the selected channel partners serve the target market and have an image consistent with the positioning of the company. There are several channels that could be used to get the product from Smucker’s to the end consumer. These possible channels are shown in the channel map below. Channel Map 1) Jif -> Consumer 2) Jif -> Online Store (retailer) -> Consumer 3) Jif -> Grocery Store (retailer) -> Consumer ) Jif -> Wholesaler -> Grocery Store (retailer) -> Consumer 5) Jif -> Wholesaler -> Grocery Store (retailer) -> Agent -> Consumer The target market for Jif peanut butter shops in grocery stores, so in order to reach the target market, the channel selected should include a grocery store. Therefore, we can eliminate the first two channel options. A lthough the number of retail chains in Germany is increasing, there are still a vast number of independently grocery stores where the target market shops. Therefore, to improve efficiency in the value chain, a wholesaler could be used to distribute the Jif peanut butter to retailers who will then sell to the end consumer. However, the use of an agent may not be value added and does have a large additional cost. Therefore, we should select option four with the potential of adding an agent between the retailer and consumer in the future if necessary. However, we must know which retailers serve the target consumers in order to select the proper wholesaler. Evaluation of Potential Retailers Retail chain stores in Germany that contain food products are: Real, Galleria Kaufhof, Kaufhaus, Aldi, and Schlecker. It is beneficial to partner with a retail chain as once a relationship is developed, the product will be supported in several locations whereas with individual retailers there would be many more relationships to maintain. All of these retail chains serve the target market. However, Schlecker and Aldi do not have an image consistent with the quality image of Jif. Aldi is viewed as a discount chain and peanut butter is not a discount product. Schlecker is viewed as more of a drug store or convenience store and does not have a large variety of products, which is not consistent with the image of Jif. Evaluation of Potential Wholesalers There are 14 wholesalers of peanut butter currently in Germany as can be seen in Exhibit 6A. Wholesalers must be analyzed to determine who would provide the most value to the partnership, such as devoting resources to marketing peanut butter, a network to distribute across the country, supplier of target retailers defined above: Real, Galleria Kaufhof, and Kaufhaus in order to reach the target market. Several wholesalers can be eliminated from the list as they are more diversified and the focus should be on those with a peanut butter expertise. Part 7: Country Climate (Environmental) Analysis Profiling the environment is critical to marketing success. Utilizing the DEEPLIST method the German scenario was analyzed by trends in population, current economic and political stability, technology for advertising, the familial social institution, and food and daily life. Population. Germany is a country of 82. 3 million inhabitants of which 74% are urban dwellers; Germans have a 99% literacy rate with a growth rate of -. 053% (CIA World Fact Book). There are two primary trends affecting the population. The fertility remains well below the replacement ratio and net immigration is low†¦the population is ageing rapidly as a result of greater longevity and low fertility rates (EIU 13). † While the percentage of females to males, in the ‘productive age range of 15-64 years old is 66% to 34%,’ with an overall low replacement rate there are fewer women opting to have children (CIA World Fact Book). This will affect our long-term prospects of marketing peanut butter to mothers and children. As Germany has a negative population replacement rate there are less anticipated children to enter into and support our target market. We analyzed the opposite extreme of the prospectus, that the ageing population could potentially be a target market. The ratio of elderly population (>65 years of age) to the working-age population (20-64 years of age) is forecast to increase substantially from 32% in 2005 to 62% in 2050 (EIU 13). † Peanut butter could easily be integrated as an easily accessible, low cost, high-protein option for seniors; however, we found their margin potential measured low and declining, very unattractive. Economy & Politics. As the â€Å"world’s third largest economy†¦ (EIU 22)† Germany has emerged as a stable environment for business, both economically and politically. â€Å"The European Commission forecasts that the German economy will remain in positive territory for the coming months but that it will barely grow in the fourth quarter of 2009 at 0. 1% after expanding an anticipated 0. % in the third quarter (PRS Group). † This suggests continued stability and growth, albeit contracted, for the upcoming years. This works as an advantage for peanut butter positioning as a wholes ome product, at a lower cost. Introducing the product now can position peanut butter for the economic rebound. If families become accustomed to integrating peanut butter now it will continue to transition as a diet component when their income allocation changes. Politically, â€Å"Germany is a stable democracy organized on federal lines (EIU 3). † The democratic political infrastructure scored â€Å"Germany [as] 13th in the Economist Intelligence Unit’s 2006 democracy index. It scores highly in terms of electoral process and civil liberties, fairly high in terms of political culture and government functioning (the latter including accountability and absence of corruption†¦ (EIU 9) and little political risk. It is not anticipated that issues of nationalization or high repatriation percentages will play any role in disrupting the distribution – nor revenues – of peanut butter. Although the strong economy and stable political system will not contribute risk factors Germany has â€Å"†¦what is currently one of the most complex tax codes in the world (PRS Group). † Recent changes will affect supply chain costs and total purchase costs. For example, â€Å"a 3-percentage-point increase in value-added tax (VAT) was added in 2007 (EIU 11). † This affects the purchase price and may deter consumers. Other taxes will play a role in the consumer’s decision making. Most of our target market is from the middle class who has income taxes at top of mind – rightfully so as taxes subtract a large portion of disposable income. â€Å"The overall top income tax rate is now 47. 5% (EIU 20). † Although most families will not face as extreme a rate the income distribution, after tax, should be considered in pricing the product. Additionally, while overall corporate taxes have decreased they remain extremely high. â€Å"From 2008 the headline rate of corporation tax was cut from 25% to 15%, reducing the combined rates of corporation tax, local trade tax, and the Solidarity Tax from 38. 65% to 29. 8% (EIU 20). This could serve as the replacement to any currency risk or otherwise with repatriation taxes. Technology. Implementing marketing campaigns requires knowledge of how consumers receive messages. Since 1995 Germany has had a strong history of media communication and av ailability via television with 373 stations (CIA World Fact Book). The birth of the Internet provided faster delivery of information and availability to the 61. 97 million Internet users, ranking it as the 6th most connected country in the world (as of 2008, CIA World Fact Book). Having strong TV, and Internet availability ensures a range of publicity options and flexibility in reaching our target market. However, one potentially costly issue for a nationwide media presence is the â€Å"limited amount of advertising carried by public radio and television companies, which operate under the supervision of the authorities of the individual states (EIU 9). † Not only is advertising limited, it is fractured amongst the states. Contracts would need to be negotiated within each of the 16 states. Social/Cultural. The most critical environmental factors revolve around the family and its social structure. â€Å"The family is still the first and most important social group of people and one of the most significant social institutions (Hintereder). † Women play the most essential role in the structure. While women continue in a traditional role responsibilities are changing within the classes. Currently, they face the main obstacle in career advancement of the â€Å"fact that the network of childcare facilities particularly for small infants is not so good on a European comparison†¦ women, even those in employment, invest twice as much time looking after children as men. To date it was almost exclusively women who have taken parental leave (Hintereder). † This supports marketing to moms and their young children. Moms select the products in their household pantry and mold the taste likes and dislikes of their children. As the employment of women increases (either full-time working moms or part-time), â€Å"now at 64 percent,† peanut butter can play a likewise increasing role (Hintereder). Instead of only â€Å"Choosy Moms,† the marketing campaign can also publicize for â€Å"Busy Moms. † Yet, working mothers alter the size of families and can decrease demand. â€Å"Families have become smaller†¦single-child families [and] two-child families are typical. Almost one third of women born in 1965 still have no children today. As the social institution ebbs and flows marketing peanut butter will likewise have to ebb and flow. Food & Daily Life. After understanding the family structure the next most key element assesses diet, nutrition, and food patterns. â€Å"Most Germans acquire food from both supermarkets and specialty shops, such as bakeries and butcher shops (Every Culture). Staple daily food items include bread, cheese, pork, vegetables (mostly starches and root, CIA World Fact Book). Many meals are accompanied by beer. While the previous data in this report noted Germans appreciating a nutritious approach to their diet many of their staple items are carbohydrate based. This supports eating a heavier, more substance based product like peanut butter. The German meal pattern suggests positive angles for where to insert peanut butter into daily life. A primary option could be at breakfast to accompany bread and the afternoon Kaffee. â€Å"Bread is the main food at both breakfast and supper. The warm meal of the day is still often eaten at noon, though modern work routines seem to encourage assimilation to American patterns. Large family meals are still common at noontime on Saturdays and Sundays. These are often followed in mid-afternoon by Kaffee und Kuchen, the German version of tea time (Every Culture). † The meals identify which daily patterns are malleable in how to suggest peanut butter be a component, an additive, an ingredient, or snack. Hotels in Germany typically include breakfast. It is very common to find small packages of Nutella provided in hotels for breakfast. Jif currently has an â€Å"on the go† packaging currently in place, a 2. 25 oz container, which could be used to directly compete with small packets of Nutella. Part 8: Recommended Marketing Objectives and Strategy Marketing objective. Within 12 months, Jif will increase volume of peanut butter purchases among all consumer categories by providing a healthful, low-cost, convenient staple item which belongs in every kitchen pantry. †¢ Time period: There are several points of resistance to enter the German market. Enough time should be taken for Jif to be able to create awareness and change consumer attitudes, but we will recommend a time period of 12 months to evaluate success. †¢ Profit impact: By increasing awareness of peanut butter’s benefits across all consumer categories, volume will be increased both in the number of containers purchased, and the purchase occasion itself. †¢ Target market: All consumer categories have a need for peanut butter in their pantry. Whether young or old, peanut butter makes an excellent bread spread for breakfast or lunch; an easy snack item; a delicious ingredient in baked goods and ethnic meals; a fuel recharger for hikers; a protein substitute for vegetarians, vegans, and those with dental problems; a gluten-free product for those with wheat allergies; a kosher product; a delicious and filling product for those on a low-carbohydrate diet such as Atkins, South Beach, Zone, etc; the list goes on! †¢ Value proposition: From the customer’s perspective, peanut butter adds value because it is healthful, convenient, long-lived, inexpensive, and versatile. Very few consumer products can claim all those benefits! Marketing strategy and proposed positioning. Jif is an essential pantry product for all consumers among all staple food products because it is the only truly healthful, low-cost, convenient, delicious, and versatile product available on the market. Jif’s offerings are different from competitors in the following ways: †¢ It is much more healthful than Nutella, which is presumed to be healthful but is actually is high in added sugar and fats. †¢ It is much more versatile than Nutella, which is marketed as solely a bread spread. †¢ It is much more convenient than the natural peanut butters already available in Germany, which are not as long-lasting, must be refrigerated, must be brought to room temperature and stirred before useful as a spread. †¢ It is different from existing spreadable peanut butters available in Germany because it will be aggressively marketed as a quality, low-cost global brand with a million uses. Other competitors position it as bread spread only. Branding objective. Because of the points of resistance for German consumers, namely an unfavorable image of the product and country-of-origin, as well as a lack of awareness of the versatility of the product, the communication regarding the product will have to be changed quite significantly from the U. S. program. However, the product itself will remain the same, which will generate significant scale advantages. Our branding strategy then will be a combination of product extension and communication adaptation. The brand will need to portray that it is a sophisticated global product, yet de-emphasize its American roots. This is necessary due to the perception of the German consumer that American products are fattening. Part 9: Marketing Mix Program Product. Since we have identified a German perception of peanut butter as unhealthful, we need to combat that belief by marketing the peanut butter types that are more wholesome. Out of the Jif product line, we will take Creamy and Chunky have been the quintessential best-sellers. The smaller sizes would be introduced first, which is 18 oz. To compete with small packages of Nutella served in many restaurants and hotels for breakfast, the â€Å"Jif To Go† packages should also be introduced, which are 2. 25 oz cups. Ideally, Jif should have multiple product lines and sizes in Germany so that multiple facings of its containers will be seen on grocery store shelves. This repetition of name and pattern on the shelf will help to increase brand familiarity. However, the rest of the Jif product line will be withheld initially while the consumer is acclimated to the two main peanut butter choices. The other product lines such as Jif with honey, and Jif Omega-3 may be introduced later in small quantities; possibly as a consumer preference test. As peanut butter sales grow in Germany, Jif can plan to grandstand new product line introductions as well as the larger size containers, such as the 40 oz size. These campaigns will serve to reinforce peanut butter in the consumers mind, and entice consumers to try the hottest new flavor from Jif. Personal service. Jif will create and maintain a localized website for the German market, with an easy-to-remember URL which will be displayed prominently on all advertising. The website will be customer-focused, with clearly labeled sections for nutrition information, recipes, types of products, store locator, an FAQ section, a â€Å"contact us† link for questions or comments, and a money-back guarantee for customer satisfaction. The website should be functional yet elegant, as the Ferrero website is today. Each customer segment should be represented (a page specifically for kids, moms, vegetarians, etc. ) showing the benefits that peanut butter provides for them specifically. This will enable vegetarians doing a Google search in Germany to find a hit on the Jif website, for example. Price. Jif should be particularly cautious about pricing in Germany. The price should be maintained at an affordable level to spur consumer interest as a snack food, but not so low as to have unwanted perceptions of low-quality or that the product may be close to expiration. Any price reductions should be limited to sales with widespread advertising attached to gain customer awareness. The normal pricing level should be set very near to the level of Nutella, and with margins similar to that of the U. S. Comfortable margins should help the marketing team to convince grocers to provide superior shelving locations and multiple facings. Current peanut butter pricing is around 3-4 EU (see Exhibit 5E). Smaller containers are prevalent in Germany; therefore Jif will have a higher fixed cost due to the packaging. Price per gram will likely be higher than the Jif pricing in the U. S. to cover these costs. In Germany, we anticipate a similar price as the U. S. , only for a smaller container. Placement. Jif should strive to get the best shelving possible initially, to get large consumer attention. End caps of isles, and free product tasting tables should be used. At the tasting tables, peanut butter should be served on fresh bread as we anticipate the product will be used that way most. In addition, the service should contain other healthful ways of eating peanut butter, such as in a celery stock. All parts of the presentation should be arefully considered to create the perception of healthfulness. The placement should be put together to appeal to mothers, and to be highly attractive to kids in the cart as well. Promotion or Communication. Our number one goal is to increase awareness of the Jif product. Peanut butter has such a low penetration in the spreads market in Germany today; consumers just don’t consider the product as a necessary item in their pantry. Therefore, we recommend a startling, attention-grabbing promotion that runs via internet and television commercials for a short period, perhaps 30 days. The idea is to generate attention with ad that has the potential to generate excitement. After creating a buzz and an interest in the product, our next objective is to clearly communicate the benefits of peanut butter, including communication on the nutritional benefits, quality processing, and alternative uses. The advertisements will be done via television, internet and print ads that all show images of the various ways that peanut butter is enjoyed. Until a spoken segment at the end of the television or internet commercial, the images in the ads are displayed wordless. On television, the absence of words is an attention-grabber itself. Viewers who have â€Å"tuned out† during the commercial break may think their TV has stopped working, or their regular programming has resumed. If we can capture their attention and then hold it through a series of captivating images, we will have succeeded in creating awareness. Another benefit of the simple image campaign is that it can be easily reinforced in the product’s website and print ads such as magazines, billboards, newspaper coupons, mailers, etc. , by using the same images, thus tying the whole theme together. The website, which is clearly communicated in all advertisements, will prominently display the nutritional benefits, recipe ideas (see Exhibit 9B), and a store locator, as well as repeating the branding from the ad campaign. There are numerous examples of images that could be used. There’s the hiker who needs to refuel and pulls out a tube of peanut butter; the kid opening his lunchbox at school with a heart-shaped peanut butter sandwich from Mom, or making one for himself as an after-school snack; the hip cocktail party eaturing celery sticks and peanut sauce; the vegetarian (wearing an â€Å"I heart animals† sticker to show she’s vegetarian) getting her protein fix; the kosher individual; the dieter; the Germa n immigrants enjoying peanut sauce in a Thai dish, and mole in a Mexican dish; and finally, getting back to the roots of when the product was created, there’s the old toothless man with a huge smile, eating peanut butter right out of the jar. See Exhibit 9A for images of this cast of characters. At the end of the series of images, again the Jif jar is superimposed with the tagline (translated into German): â€Å"Peanut Butter: It’s more than you think. † The images are wordless, except at the very end when the tagline and a brief list of the nutritive benefits are spoken. The benefits include that the product is high in protein and monounsaturated fat which is good for your cholesterol, low in saturated fat and sugar, high in dietary fiber and other vitamins. Peanut butter is vegan, low-carbohydrate, gluten-free and kosher. Another popular promotion in the U. S. was a recipe contest in using Jif as an ingredient with a financial prize. This could be replicated in Germany. It should be noted that all advertising campaigns will require partnering with a local firm to choose the right wording, and to make sure that none of our taglines or acronyms could be misused in a non-flattering way. Professional Sales force. The sales force will be tasked first and foremost with getting entry to German grocery stores and getting the premium shelving during the peanut butter â€Å"awakening campaign. The sales force should be tasked with stocking the shelves, and working the free product testing tables. Peanut butter is not a discount product and the expert German salespeople should be therefore groomed to present the desired company image of quality. The Jif sales force will be tasked to develop recipes for caterers and restaurants, and to provide comprehensive sampling and product use education to chefs. Award winning chefs and restaurants may be compensated to develop German dishes using peanut butter. Jif may sponsor cookbook authors that include recipes with Jif. The sales force should exhaust all avenues to increase German familiarity with peanut butter. Part 10: SWOT Analysis External Analysis: Opportunities. The country with the largest market potential for peanut butter in Europe is Germany (ibid 79). Peanuts and peanut flavoring are already present and popular in Germany, such as in Thai Cuisine or the popular snack Erdnuss Flips. Therefore Germany can be looked at as a strong potential peanut butter target market. Peanut butter is more nutritious than the leading bread spread as it is high in monounsaturated fats, which actually reduce cholesterol. Peanut butter is also a good source of protein for vegetarians and vegans. Germany is a member of the European Union which will allow Jif to easily extend their target market to other parts of Europe as long term growth strategy. The infrastructure is also well advanced to facilitate the transportation of products from initial manufacturing plants to various distribution locations or for the easy transportations of required suppliers. External Analysis: Threats. With all the above mentioned opportunities, there are some challenges that Jif is called to highlight and be aware of in other to successfully execute in the German environment. There is the threat of a salmonella outbreak which would create a scare of consumers. One key element is the fact that Germans view American food as being high in fat. Jif being an American brand could pose a threat to the overall strategy if not well presented and the nutritional benefits presented. Also there is an existing peanut butter company that happens to be more local than Jif when starting, and it will require that Jif differentiate itself to the customer based as a way to establish their brand in that market. Going after Nutella could be challenging as they are well positioned internationally and in Germany; their brand is established and well known. Therefore, marketing Jif will require investment in time and energy to compete. Overall, the spread market in Germany is very limited therefore requires that Jif not only tap into the existing market but also strategize to increase it using non peanut butter company spread customer base. Particularly, they need to focus on stealing Nutella’s market share. Doing business at the international level will also raise other challenges that Jif will need to deal with such as hedging of the currency, the legal requirements of the host country (Germany) vs.. that of the mother country (USA); The company will have to opt for one way of presenting their financial statement, that may need to be converted into the mother currency with all the possible implications that comes with reporting their final profit at the end of each financial year. Jif also been a new product with Germany as their first international base, has no recognized trademark internationally. Internal Analysis: Strengths. The strengths of Jif when compared to substitute products is its nutritional benefits and versatility, when compared to direct industry rivals in peanut butter is convenience. Jif’s main point of difference from competitors is their obvious appeal to mothers as the target market with their focus on the nutritional benefits of peanut butter, in the established market in the U. S. and also in Germany. Jif has a strength in advertising nutritional benefits in their home market, which is experience that could be used in Germany as well. Jif peanut butter is not only more nutritious than the leading bread spread, it is also more versatile. Jif can create an internal strength by providing many recipes that demonstrate uses of peanut butter as more than a bread spread. In Germany, many of the peanut butter brands currently available are organic, or natural, peanut butter. Organic peanut butter is less convenient as it must be refrigerated, brought to room temperature, and then stirred prior to being used as a bread spread. Whereas Jif is shelf-stable. In Germany, the refrigerators are much smaller than American refrigerators and the space must be used sparingly. Another convenience factor for hotels is that Jif already has an â€Å"on the go† packaging currently in place, a 2. 25 oz container, which could be used to directly compete with small packets of Nutella. Internal Analysis: Weaknesses. Although this program has done a great deal in addressing the gap and defining a differentiation positioning as they enter the German market, there are still few elements that remains uncertain as for their impact to the outcome. The relationship with the wholesalers and retailers cannot quite be predicted. But it is important to focus in building it right from the beginning to ensure the sustainability of the business in the long term. We need to note that Jif strategy is coming from a competitive disadvantage to current competitors as most of them have been operating in that ground for many years and had grown to establish their brand in that market. There is also the fact that this whole program’s growth depend on the fact that Jif will be able to turn over the population’s old eating habit to more include peanut butter. Although well elaborated, there is no guarantee that this campaign will be successful in increasing the target market of spread in general and that of peanut butter in particular. Conclusion and Recommendation Considering the above analysis, there is great potential for sales of Jif peanut butter in Germany. To overcome points of resistance, a focus would need to be placed on the communication of nutritional benefits and alternative uses. One of the main challenges is selecting wholesalers to work with and developing relationships with wholesalers and retailers. In developing the Jif brand, a lot will be invested monetarily, and may not see clear signs that this market may increase for many months. The program that has been proposed requires massive spending. Therefore, Jif in Germany does not seem to be profitable in the short term but could be a great success in the long run; if successful in turning people’s behavior. Exhibit 2A: Household Penetration Rates in U. S. Market [pic] Source: Dairy and Food Communications, page 217 Exhibit 2B: Demographic Characteristics of Peanut Butter Brand Use in U. S. Market [pic] Source: Marigny, page 237 Exhibit 2C: 360-Degree Profile of Consumers in U. S. Market Demographics |Housewife |Single Parent |Senior |Young Professional | |Age |25-45 |20-40 |55+ |25-35 | |Gender |Female |N/A |N/A |N/A | |Income |Low to Mid |Low |Mid – Stable |Mid – Growing | |Education |HS Grad+ |HS Grad |College Grad |College Grad | |Occupation |None to part-time |Full-time; non professional |Retired or nea r; professional |Full-time; professional | |Marital/Family Status |Married with young children |Single with young children |Married with grown children |Single without kids | |Psychographics | | | | | |Spending Habits |Conservative; will cut coupons |Concerned; will buy cheapest |Confident; will take time to |Confident and Curious; will | | | |product; no time for coupons |find best value (not just |try new products | | | | |based on price) | | |Activities & Interests |Raising kids; preparing meals at|Not a lot of free time for |Wide variety of activities and|Focus on physical fitness and | | |home; eating dinner together |activities; rarely sit down to |hobbies; very news-focused and|outdoors; hobbies and | | | |dinner together |aware |experimentation with new | | | | |things such as exotic recipes | |Opinions & Values |Value quality and nutrition over|Value quick; convenient; cheap |Quality matters above all |Interested in gaining | | |convenience | | |experience and stories | |Pu rchase Characteristics | | | | | |Purchase Occasion |Will purchase on regular trips |Will purchase on regular trips |Will purchase on regular trips|Will purchase as needed; may | | |to grocery store whenever supply|to grocery store only if needed |to grocery store whenever |be inspired by interesting ads| | |at home is running low | |supply at home is running low |or new products | |Benefits Sought |Quality and Convenience – ready |Convenience – ready to use, |Quality and health benefits; |Convenience – ready to use, | | |to use, relatively healthful, |stable on shelf, makes quick |consistency also good for |stable on shelf, makes quick | | |stable on shelf; will pay for |meals |dentures |meals; Nutrition; Prestige | | |brand name to avoid cost of | | |(â€Å"have you tried†¦Ã¢â‚¬ ) | | |experimentation with a new brand| | | | | |family may not like | | | | |Product Usage |Breakfast on toast; PB&J |Breakfast on toast; PB&J |Breakfast on toast; PB&J |As a staple; also as an | | |sandwiches for lunch; as a snack|sandwiches for lunch |sandwiches for lunch; as a |ingredient in exotic new dish | | |on crackers or celery sticks; | |snack on crackers or celery | | | |peanut-butter cookies; | sticks | | | |occasional dinner recipe | | | | |Margin Potential |Low |Low |Low |Low | |Volume Potential |High |Med |Med |Low | |Persuasion Potential |High |Low |Med |Med | Exhibit 2D: Product Positioning Map in U. S. Market [pic] Exhibit 3A: Sales Volume and Value Trends of Nut-Based Products in Germany [pic] Source: Euromonitor, page 3 Exhibit 3B: Market Potential for Peanut Butter in Europe [pic] [pic] Source: Parker, page 79 Exhibit 3C: Sales Volume and Value Trends of Spreads in Germany [pic] Source: Euromonitor, page 2-3 Exhibit 5A: Actual and Forecasted Sales of Spreads in Germany 2009 Sales |volume in ‘000 tonnes | |value in EUR millions | |% volume growth | |% value growth | | | | | | |2008/09 | |2008/09 | |Jams and preserves |138 |44| | 55|44% | |0. 4 | | | |% | |3. | | | | | | | | |4 | | | | |Jams and preserves |139. |45% | |Nutella |Ferrero |17. 1 | |Schwartau |Schwartauer Werke |9. 5 | |Breitsamer & Ulrich |Breitsamer & Ulrich |5. 0 | |Zentis |Zentis |4. 9 | |Langnese |Langnese Honig |4. | |Movenpick |Schwartauer Werke |3. 2 | |Nutoka |Aldi Einkauf |3. 0 | |Biophar |Fursten-Reform Dr Med Hans Plumer Nachf |2. 3 | |Bel Royal |Zentis |1. 8 | |BelFruit |Zentis |1. 0 | |Biogold Reformkost |Biogold Reformkost |0. | |Barney's Best |Dockhorn & Co |0. 7 | |Dr Kriegers |Fursten-Reform Dr Med Hans Plumer Nachf |0. 6 | |Nudossi |Vadossi |0. 4 | |Ultje |Ultje |0. 2 | |Milky Way |Mars Deutschland |0. 2 | |Snickers |Mars Deutschland |0. 2 | |Private label |30. 0 | |Others | |14. 5 | | | |100. 0 | Source: Euromonitor, page 4 Exhibit 5C: Nutella’s Nutrition Information [pic] Clicking â€Å"Ingredients†: [pic] Source: http://www. nutellausa. com/nutrition. htm Exhibit 5D: Nutrition Panels Compared Jif Cream y Peanut Butter: Nutella: [pic][pic] Source: Jif website Source: Nutella website Exhibit 5E: Local Competitors and Pricing [pic] [pic] Source: Photographs taken by team member Cesar Palma Perez in Germany store Exhibit 5F: Product Positioning Maps Nut-based subsector: [pic] Spreads market in general: [pic] Exhibit 6A: Peanut Butter Wholesalers in Germany |Wholesaler |Area of Expertise | |Jakob Distler Gmbh in Nurnberg, Bayern, Germany |Salted and roasted nuts and seeds, Nuts, glace, Confectionery, Roasted Nuts and Peanut| | |Butter Manufacturing, Nonchocolate Confectionery Manufacturing, Confectionery Merchant| | |Wholesalers†¦ |Lauenburgische Gewurzmuhle Und Rosterei Gmbh & CoKg |Nuts: dried, dehydrated, salted or roasted, Packaging and Labeling Services, Roasted | |in Elmenhorst, Schleswig-Holstein, Germany |coffee, Roasted Nuts and Peanut Butter Manufacturing, Packaging and Labeling Services,| | |Coffee and Tea Manufacturing†¦ | |Irecge NussverarbeitungsgesMbh in Tornesch, |Salted and roasted nuts and seeds, Nuts, salted or roasted, Roasted Nuts and Peanut | |Schleswig-Holstein, Germany |Butter Manufact uring, Confectionery Merchant Wholesalers†¦ | |Schummer-Fruchthandelsgesellschaft Mbh in |Nuts: dried, dehydrated, salted or roasted, Roasted Nuts and Peanut Butter | |Birkenfeld, Rheinland-Pfalz, Germany |Manufacturing†¦ |Rudolf Muller in Buchen (Odenwald), |Architectural Services, Architectural Services, Professional engineer, Engineering | |Baden-Wurttemberg, Germany |Services, Nuts: dried, dehydrated, salted or roasted, Nuts, Roasted Nuts and Peanut | | |Butter Manufacturing, Confectionery and Nut Stores, Photographic equipme