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What should a company do if one of its small brands has a very large share of a declining category? “One thing you can do is consider whether that category is correctly defined,” said Frank Thometz, ’89, former marketing executive for ACH Food Companies, Kraft Foods, and Mars Snackfood USA. “Is it possible that you should redefine your competitive set?”
In the case of revitalizing Honey Maid Graham Crackers, Kraft discovered such redefinition was exactly the remedy for saving the popular snack from oblivion, Thometz told the Marketing Roundtable at Gleacher Center February 26.
Faced with a 55 percent share of the declining category of graham crackers, the company developed five new product concepts that leveraged the Honey Maid name into new forms of graham crackers that the company tested on the public, Thometz said.
After consumer screenings, the best idea – stick-shaped grahams that were portable and easy to serve -- was then studied by BASES, a Nielsen Company service that tests new brands with consumers. These Sticks scored extremely well on initial concept appeal, post-usage appeal, volume potential, and financial viability, he said. After they were launched in the market, these flavored graham sticks sold even better than projected by BASES, Thometz said.
Driven by the new sticks, in 2002 the Honey Maid brand increased its sales by 15 percent and significantly increased sales of graham crackers overall, he said. “The shipments were very strong and it was a clear success,” Thometz said. “Share gains and profit growth were terrific.”
However, the company was hesitant to invest advertising dollars to maximize the launch. Thometz and his team had failed to paint a compelling long-term picture for the brand. So the brand team quickly performed research and analysis to get the rest of the company behind the idea, he said. The team analyzed old research to determine why the category was declining, then showed what was distinctive about the new product and eventually persuaded the company to invest in the project, Thometz said.
Interaction data showed that graham crackers had been losing volume to the broader competitive set of wholesome snacks, he said. Consumer panel data revealed one-third of the use of Honey Maid Graham Crackers occurred in the morning, not in the afternoon, as believed by the company, Thometz said. “Lastly, we showed our profit margins were number two in the whole portfolio and our marketing investment paybacks were strong on TV, print, trade, and in stores,” he said.
The four key lessons in this case study about revitalizing a small brand are that it requires allowing outsiders to take a fresh look, stepping back and reconsidering its frame of reference, using old research to track changes, and finding ways to increase the “Four U’s,” Thometz said. “The four U’s are users, usage occasions, ubiquity, and usage rate,” he said.
To take a brand to another level, marketers must paint a clear picture of a long-term strategy, how the business fits into the company’s total operations, and how it distinguishes itself from the rest of the company, Thometz said.
“The presentation was approved by Kraft Foods.”
– Phil Rockrohr