Assuming that this is homework and you are looking for an algorithm (which is why you aren't using String.replace), just remember that strings and arrays are basically identical and can both be iterated.
A simple (inefficient) algorithm:
1.Create a submethod to match a substring against the current index in the main string. i.e.
private boolean matchAt(String inputString, String target, int index){
// YOUR CODE HERE - returns 'true' if the target string occurs in the
// inputString at the specified index.
}
2.Iterate over the input string, testing at each letter if the target word has been found.
3.Append output one character at a time to a StringBuilder, based on whether or not the target word has been found.
For a more efficient algorithm, check out the following link on how string search can be implemented using suffix matching: http://en.wikipedia.org/wiki/Boyer%E2%80%93Moore_string_search_algorithm