Kraft Foods is working to reach consumers more directly, and seamlessly.
Kraft has staffed up to better integrate marketing, is tapping advertising credits for promotions and branded entertainment and keeps investing in new technology.
All three efforts signal a growing sophistication in below-the-line marketing as Kraft works to keep pace with consumer trends and technology.
Last year Kraft appointed five “integrated marketing communication leaders,” one for each of its product divisions, to bridge work across marketing disciplines. The five, who report to VP-Marketing Resources Jane Hilk, each have experience in a specific discipline (advertising, promotion, direct marketing) and work together to coordinate marketing for all brands, while also working on behalf of their own division (Beverages, Cheese & Dairy, Convenient Meals, Grocery, Snacks & Cereals).
Kraft also has established a protocol to plan promotion, p.r. and other below-the-line work at the same time as advertising. “We value expertise in those different marketing disciplines and we don’t want to lose that,” says Barb Ford, VP-global advertising services & marketing training.
Kraft also is stepping up consumer relationship management (CRM) efforts, testing recipe delivery via iPod and RSS feeds while leveraging food & family Magazine, the cornerstone of Kraft’s CRM work. About 10 million subscribers get the custom-published magazine five times a year to match “the seasons of Mom”: winter, spring, summer, back to school and holiday. “Mom changes her mindset five times a year,” says Kathy Riordan, Kraft VP-global digital & consumer relationship marketing. Different versions target households with kids, without kids, Hispanics and African-Americans. Response rates are good: coupons in the magazine have a 4% to 5% redemption rate, and related e-mails are opened 40% to 50% of the time. Kraft also tracks food & family’s impact on sales, matching subscribers’ ZIP codes with store-level data. Brands’ volume sales have risen around 5% to 13%.
Kraft is expanding the magazine overseas, piloting a lifestyle-themed publication this summer in Germany (where its coffee and sweets brands are strong) and readying a Brazilian version to bow this year, using some content from its Spanish-language comida y familia in the U.S. Three initiatives launched in France last year via direct mail, e-mail and the Internet.
In the U.S., consumers can request specific content (Counting carbs? Calories?) online and register to get recipes via e-mail, podcast or RSS feed. Consumers register at kraftfoods.com/onthego for up to three daily RSS feeds (easy dinners, seasonal desserts, top-rated recipes), which come directly to their desktop, bypassing e-mail. It’s one way to combat a decline in e-mail open rates, Riordan says. RSS feeds, which deliver syndicated content on topics that consumers specify, “could really transform the digital marketplace. It has the potential to be a disruptive technology,” she adds.
Kraft also is leveraging its media heft for special publications. About four years ago, Kraft’s brands began pooling the “merchandising credits” that Time-Warner gives to heavy advertisers. (Kraft spends more ad money at Time-Warner than anywhere else.) The credits weren’t enough for one brand to do much, but together, they funded some effective umbrella promotions. Two years ago, Kraft ratcheted that up with special editions of People magazine, with Kraft as the sole sponsor. In November 2005, Time-Warner distributed 1 million copies of a holiday-themed People Extra: Share the Joy (and 350,000 copies in Spanish), and orchestrated the December All-Star Holiday Party on Food Network, with seven TV chefs including Bobby Flay and Emeril Lagasse, sponsored by Kraft. “Those became the two centerpieces to display our products,” says Don Miceli, Kraft VP-global media resources.
Last month, Time-Warner followed up with 1 million copies of People Extra: Your Diet. Most were mailed to People subscribers, with some on newsstands.
Kraft’s tie-in with NBC’s summer 2005 series American Dreams began with an ad buy, too. Conversations between Kraft’s media shop, Starcom MediaVest Group, led to meetings with American Dreams’ producer and brand teams for Oreo and Kraft Singles cheese. In the end, the brands were featured so prominently in some scenes that “people asked, ‘Isn’t this a commercial?’ It wasn’t, but it was such a perfect fit for the brand,” Miceli says. “People think of brand entertainment and right away think, ‘How many dollars do we have to throw at it?’ But there’s a lot you can do that will make an impact with consumers at no incremental cost.”
Kraft’s South Beach Diet brand sponsored a week of “inspirational” movies on cable network Lifetime, with “showmercial” vignettes that followed four dieters as they planned, then threw a party. Brand awareness jumped 14%, and cookbook sales spiked, Miceli says. That deal began with the brand team, not a media buy, and involved ad, promo, p.r. and Internet agencies to flesh it out.
In Eastern Europe, that mix of advertising and entertainment suits Jacobs coffee, which sponsors celebrity interviews (in print and broadcast) under the tagline “Conversations with a unique aroma,” an extension of its Verwohnaroma (“passionate aroma”) positioning. Advertorials and sponsored TV segments in Romania and Ukraine carry a coffee-cup logo and the tagline, and positions Jacobs as a brand that inspires “talks that matter,” Ford says.
New Media Gets the Nod
Last year, Kraft shifted some upfront TV dollars to buy broadband ads to reach light TV viewers, pitching entertainment and product info on demand for Maxwell House, Macaroni & Cheese, Philadelphia cream cheese, Kraft Singles and Fruit2O on AOL, iVillage, MSN and Scripps sites. Kraft also tested a TiVo sweepstakes while sponsoring A&E’s “Hollywood Home Movies” and got several thousand clicks, Miceli says.
“We invest a relatively small amount of money [from Kraft’s five divisions] for new technology and media ideas, and have a 30% to 60% success rate,” says Paula Sneed, Kraft’s executive VP-global marketing, research & initiatives.
“We know it’s O.K. to fail, as long as we fail fast and fail cheap,” Riordan laughs. “Digital won’t replace broad-based marketing, [but we must address the question of] how to take the power of our brands and the power of technology and deliver against consumer solutions. … Our focus has been so strong on Web and e-mail that we don’t want to miss a sea change in the way consumers are having content delivered.”
Sometimes new technology makes for fun premiums. Kid sites Postopia.com and NabiscoWorld.com sold Kraft-branded game pads from November through January. Kids plug the $15 game pad into a USB port on their video game system, then step on the floor-mat pad to make video game characters move—like popular Dance Dance Revolution video games. Kids download two free games from Kraft’s sites; a third game, pegged to Kraft’s Major League Soccer sponsorship, breaks this quarter. Kraft started with 10,000 game pads via Skyworks Technologies, Hackensack, N.J.; no word yet on how they’ve sold, but if it goes well, Kraft may use game pads for brand-specific self-liquidating offers this year. (Modem Media, Norwalk, CT, handled the online offer.)
The “exertainment” push is a nice fit for Kraft’s health and wellness mission to promote healthy eating and living, Riordan says: “We can definitely deliver against eating well; it’s living well [and physical activity] that’s the challenge.”
FORGET THE STORE SHELF
Kraft Foods studies food trends via its annual “Food Cast” consumer survey to peg flavor, nutrition and cooking-technique trends at four stages: mainstream, momentum, discovery and futuristic. It also categorizes restaurant trends in order to jump in when a trend is widespread enough to translate to packaged goods.
Kraft also looks in pantries every four years or so—literally—with a mail-in survey to about 1,900 households (including Hispanic and African-American panels) that occasionally asks respondents to send photos of their cupboards and fridges. Kraft uses that and other research to pinpoint its “strategic value consumer” for each brand: “This is the behaviorally homogenous group that represents the brand’s best prospects,” says Paula Sneed, Kraft’s executive VP-global marketing, research & initiatives.
Take Jell-O, a $500 million brand with 60% household penetration. Research showed that Gen Xers want snacks that aren’t boring—and older women want low-cal indulgence. That prompted print and TV ads that broke last month, themed “Every diet needs a little wiggle room,” with different versions keyed to both demographics (for flagship and sugar-free Jell-O). The brand also sponsored the $250,000 grand prize on NBC’s The Biggest Loser II, with recipes featured in episodes. (One contestant quipped, “Who needs a man when you’ve got Jell-O pudding?”)
Awareness and intent to buy Jell-O shot up, as did ratings for Loser’s live finale, to a 9.4—“a bright spot on NBC’s schedule,” says Don Miceli, Kraft VP-global media resources.
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