by Lynn Petrak
Campaign season is always under way for dairy products,
as competition thickens within and outside the category.
“Marketing”
is one of those terms that gets tossed around a lot, a buzzword for some
and a real business driver for others. However it is defined or prioritized
within a company, marketing plays an undeniable role in building product or
brand awareness, boosting sales and, ultimately, improving profitability.
In today’s competitive retail and
foodservice climate, marketing dairy products becomes even more important
— and complex. More often than not, marketing campaigns are
integrated programs, encompassing new product development, product
packaging, market research and advertising through a variety of media,
public relations and grassroots promotions.
Whether driven by their own desire to capture
market share or inspired by successful general marketing efforts from
industry-funded organizations, processors increasingly invest in marketing
to stay competitive, both within and beyond the dairy category. “We
have to be very aggressive,” reports Jill Schroeder, brand manager
for St. Paul, Minn.-based Hyper Cow Inc., which produces a new line of
Hyper Cow™ flavored milks with caffeine. “We are competing not
only with similar dairy products, but in the case of Hyper Cow, we are
competing against soft drinks and energy drinks as well. Since our
competitors have more marketing dollars, our best defense is
creativity.”
Sandy Kelly, director of marketing for
Phoenix-based Shamrock Foods Co., agrees that a comprehensive, detailed
marketing plan is critical. “When a consumer sees any given piece you
are doing, whether it’s a print ad, radio spot or package, it all
works together and delivers the same, consistent message. It’s
meaningful to them and what their needs are,” she says.
While promotions and advertising of some sort have
always been part of the sales mix for dairy, sophisticated approaches to
marketing were not, particularly with fluid milk. “If you look at the
years from, say, 1965 to 1995, there was virtually no change in what milk
did,” says Kurt Graetzer, chief executive officer of the National
Fluid Milk Processor Promotion Board and Milk Processor Education Program
(MilkPEP) Board, Washington, D.C. “From ’95 to now, there have
literally been quantum leaps. (Dairy) companies are becoming really good
and in some cases very adept competitors to people like Pepsi and
Coke.”
J.T. Wilcox, director of operations for Wilcox
Farms, Roy, Wash., has served on the MilkPEP board and says the
industry’s focus on aggressive marketing tactics has changed the face
of the marketplace. “I think we are working on totally different
issues than we were 10 years ago,” he says, recalling how milk and
other dairy products were getting squeezed by other foods and beverages.
“Without some industry effort, I don’t think we’d be able
to stand up to that kind of attack.”
Industrial Revolution
Many of the recent hard-hitting marketing
strategies for dairy products can be traced to general industry-funded
programs that took shape during the 1990s. For example, as America’s
dairy producers funded research projects to reinforce positive nutrition
messages through the National Dairy Council and other arms of Rosemont,
Ill.-based Dairy Management Inc., MilkPEP broke new ground with its bold
advertising and promotional campaign for milk.
As anyone who has opened a magazine in the past decade probably
knows, MilkPEP’s Milk Mustache/“got milk?” campaign, funded by both processors
and producers through MilkPEP and DMI, is likely to go down in the annals of
marketing history as arguably one of the most well-known and influential ad
programs. Rolled out by MilkPEP a decade ago, the Milk Mustache campaign continues
to focus on milk’s nutrient profile, with different twists and celebrity spokesmodels.
The ads, which can be linked to increased milk
consumption among teens, have always been part of a broader project, as
Graetzer is quick to point out. “What’s really important to
understand is that what we do and what we get involved in and the effects
of this program are way beyond just an advertising campaign,” he
explains, Graetzer points to public relations efforts aimed at industry
issues, promotional programs targeting retailers and schools and
distribution and packaging changes that help make milk available through
vending machines and convenience stores.
Currently, MilkPEP is working on a host of new
marketing programs, from readying the latest celebrity milk mustache ads to
updating the popular www.whymilk.com Web site to developing two new
Spanish-language television ads. “People ask if it’s still a
viable campaign. Every year, the amount of impressions we are able to
generate increases and the press still comes calling when we have a new
celebrity with a milk mustache,” says Graetzer.
Similarly, marketing is never far from mind at
DMI. The group regularly works to share the results of its initiatives and
research with influential members of the health profession, education field
and the media, through traditional advertising and marketing elements as
well as through educational and public relations activities.
“It’s a monumental time right now. Not only are we working on
our 3-A-Day program, which promotes milk, cheese and yogurt, but there are
lot things we are doing on milk side, like the new plastic single-serve
resealable bottle that will be available at McDonald’s,” says
David Pelzer, DMI vice president of industry relations.
Supported by several studies underscoring the
importance of milk in a healthy diet and its role in weight loss,
DMI’s 3-A-Day of Dairy program is the subject of an upcoming series
of ads, promotions and collaborations with processors and other strategic
partners. “We have three real power periods this year,” says
Kevin Burkum, DMI senior vice president of retail channel development.
“March is one, with a new 3-A-Day magazine print ad and three new
television spots. Then we will come back for June National Dairy Month for
another series, and in the fall, we will be talking about 3-A-Day more for
the weight-loss benefit.”
In addition to touting dairy’s natural
health claims, the new ads highlight the appetite appeal of dairy products.
“It really leverages the fact that while dairy is healthful, it is
the dairy you love,” Burkum says.
Meanwhile, beyond the 3-A-Day of Dairy projects, DMI will be
busy on the marketing front helping fast-food giant McDonald’s launch a new
single-serve flavored milk product into all of its franchises, along with continuing
its vending initiatives and school milk programs.
The group’s marketing work continues,
despite a February ruling by the Third Circuit Court of Appeals in
Pennsylvania that the dairy producer checkoff that helps finance 3-A-Day is
unconstitutional. That verdict is expected to be appealed, and so far at
least, programs haven’t been impacted. “There was nothing in
that ruling that said anything about the stoppage of business as
usual,” says Pelzer. “In the meantime, we continue to do our
thing to increase demand for dairy products.”
As they monitor industry happenings and brainstorm new
marketing tactics, industry groups are keenly aware of the importance of
validation. “I think there is no question we’ve been able to
stem the steady decline of milk that had been going on for 50 years,”
says Graetzer. “The most recent analysis showed that the industry
sales are about 4.5 percent higher than they would have been without the
program.”
From the perspective of a dairy processor who has
helped with his company’s marketing programs and served on an
industry group’s board, Wilcox believes mutual efforts have worked to
the advantage of the entire category. “The thing we’re doing
the most, something I think we owe to the national campaign, is innovation,
whether it’s in packaging or flavors,” he says. “The
growth hasn’t been really rapid, but it’s been steady and
we’ve all really taken the fight right to where our competitors are.
Long term that has made a difference.”
The Campaign Trail
As Wilcox notes, generating excitement in the dairy case has
largely stemmed from innovation on the product development side (think single-serve
flavored milks), but those products couldn’t move without effective, visible
marketing initiatives. Increasingly, whether for new products, re-packaged products
or existing product lines, processor marketing campaigns are becoming more integrated
to create a buzz and deliver a powerful message.
“That is important more than ever in
today’s fragmented media market and with increased competition for
consumers in terms of share of voice,” says Kelly. “It is
important to make sure everything is working together.”
To do that, Kelly says Shamrock, like other
marketing-savvy dairy companies, starts with the ultimate decision-maker.
“It’s making sure you focus on what the consumers’ needs
are and what their trigger is, and then showing them how your product
delivers on those needs,” she says. To start the process, Shamrock
typically gauges its target audience through formal or informal means.
That strategy of beginning with the consumer is
one shared by many dairy marketers. “In every marketing initiative,
we strive to tailor an integrated message to the consumer, customer and
community,” says Susan Meadows, vice president of marketing for Dean
Foods’ Southwest Region in Dallas. “To reach the consumer, we
begin with research to better understand our target. With our retailers,
institutional and foodservice accounts, we begin every campaign strategy by
asking these questions: How can we build our brand? Will this idea create
more value for our customers? Will our customers be excited by this
idea?”
Although product development and market research
are the kickoff points for many marketing campaigns, how the product is
delivered — like packaging — also is an essential marketing
tool. To that end, many marketing dollars and resources have been spent
turning packages into extensions of a communications strategy.
Shamrock, for instance, recently won an Achieving
Excellence Award from Washington, D.C.-based International Dairy Foods
Association (IDFA) for Best Overall Package Redesign, for the
company’s new dairy creamers packaging. “Our packaging is
really the cornerstone of our brand,” says Kelly. “We have
found it is a critical part of the marketing mix and that is how we look at
it – it’s responsible for closing the sale.”
Likewise, Smith Dairy, Orrville, Ohio, is known to
invest heavily in packaging as part of its core marketing program.
“Our package design is the most important tool we have to deliver our
brand message. We take advantage of the label space to differentiate and
educate,” says product marketing manager Penny Baker. “For
example, our gallons of milk in yellow jugs have a stretch-wrap label that
acts as a billboard to tout the benefits of milk, especially in the yellow
container. We are consistent with our message that ’Yellow protects
milk better.’ That message is drilled into consumer’s
minds.”
For new products especially, packaging is perhaps the
most upfront way to create interest for a previously unseen item. When
Buffalo, N.Y.-based Sorrento Lactalis, for example, launched new
Shapesters® shaped natural cheese snacks last year (an Achieving
Excellence winner for Best New Product), packaging was considered a basic
part of the marketing umbrella. “The package is an important part of
promotions — it is a billboard on a shelf,” says product
manager Mary Genco.
Cut to Commercial
Traditionally, advertising has been the flashier
part of marketing, a powerful and often effective way to reach large
numbers of consumers through newspapers, magazines, television, radio
outlets, billboards, coupons and direct-mail pieces. The checkoff-funded
Milk Mustache/“got milk?” ad series is one example of the
staying power of ads embraced by the public. “Our recall of
advertising is stronger than Pepsi or Coke, and they spend four times more
than we do,” says Graetzer, noting the campaign works on many levels.
“The milk mustache campaign is not only great but it is consistent.
That consistency is one of our great allies.”
Individual dairy processor advertisements have
received accolades for their creativity as well. Sorrento Lactalis won this
year’s Achieving Excellence award for Best Overall Television Ad for
its new Shapesters commercial. “Television is very important in the
beginning for initial awareness. We had to focus on that, we build
awareness in store, because repeat comes with trial,” says Genco.
Although television and magazine print ads attract
attention, transit advertising has long proven effective, too. Billboards
are often utilized by Minneapolis-based Marigold Foods, awarded an
Achieving Excellence distinction for Best Billboard/Transit Ad. Tied into a
promotional partnership between the company’s Kemps ice cream and
Northwest Airlines World Vacations, the most recent set of billboards
highlighted a series of rotating travel-themed flavors in Kemps ice cream
line, such as Moon Over Maui and London Truffle. “The billboard was a
very important part of it. It gave us visibility,” says Raquel Melo,
senior product manager for frozen desserts.
Other examples of traditional advertising formats
include freestanding inserts (FSIs), usually with coupons, published in
weekend newspapers and direct mail pieces, sent to various key audiences.
Horizon Organic, Longmont, Colo., won an Achieving Excellence Award this
year for Best Direct Mail, for its piece educating health professionals
about the dairy company’s new organic infant formula. “It had
educational information about infant formula and a sample and was mailed to
doctors and pediatricians to give them an understanding about organic
infant formula and Horizon Organic,” says Gwen Scherer, director of
marketing. “We want to have a close partnership with pediatricians,
because parents really rely on pediatricians to give them
advice.”
In addition to single elements, when budgets
allow, many dairies opt for advertising via numerous channels for a bigger
bang. Shamrock, for example, was honored by IDFA for Best Mixed Media
Campaign for Milk, a program that included advertising, public relations
and promotions. Built around a new chocolate malt single-serve milk
variety, the campaign targeted parents and featured traditional print and
radio advertisements as well as a sweepstakes contest offering a trip to
the Baseball Hall of Fame.
Kelly says Shamrock’s campaign was effective
because the ads were coordinated as well as attention-grabbing.
“It’s fun, it’s different and it’s creative, to get
them excited about drinking the product,” she says, adding market
research bore out the success of the ads. “We tracked it at different
time periods and found that not only during the launch of this product
— but also across the entire line — we were able to sustain
growth.”
Meanwhile, as media outlets continue to diversify,
there are new opportunities for advertising. Dean Foods’ Southwest
Division, for example, has investigated different types of formats for its
various campaigns. “Certainly TV, radio, print and outdoor are basic
to us, but we’ve begun to expand into other non-traditional avenues
such as mall posters, Cineplex advertising, one-sheet posting and Web site
messaging with great success,” says Meadows, adding the type of
advertising depends on the product and the market. “There is no
one-size-fits-all solution. Each market is different and we work closely
with these dairies to customize the most effective strategy for that
particular area.”
Getting a Promotion
Delivering commercial messages through channels
that reach consumers in their homes, at work or in transit are important
for generating product interest, but grassroots promotions are considered
by many companies to be essential. Promotions encompass a variety of
different elements, like retail point-of-sale (POS) materials, sweepstakes
and sampling. “Point of purchase is incredibly important and there
have been a lot of studies done on the incremental lift you can get at that
level,” says Kelly, who says Shamrock has increased its store
promotions in recent years.
Product launches are almost always accompanied by
some sort of promotion, evident by Hyper Cow’s highly targeted
efforts during the rollout of its new caffeine-spiked flavored milk.
“When we launched the product, we conducted some very aggressive
guerrilla sampling,” remembers Schroeder. “We branded a vehicle
with our logos and passed out the product on college campuses, skate parks,
high school sports tournaments and high traffic areas for young adults. We
also ran radio spots and hosted a launch party with national skateboard
talent at the Mall of America (in suburban Minneapolis).”
Many promotional events are annual, offered
seasonally. Smith Dairy, for instance, runs at least two in-store
promotions for its brands each year, most recently a “Moo Money
Madness” program during the 2003 holiday season. “Our objective
is to create brand awareness at the consumer level, creating a pull through
at retail,” says Baker, adding Smith Dairy provided supermarkets with
POS materials, prize packs, ad slicks and customized radio tags. Next up is
the company’s spring and summer promotion for its Ruggles® ice
cream line. The Ruggles Road Tour is a grassroots campaign to reach
consumers in northern and Central Ohio through buses that make appearances
at community events and retail store openings.
Kemps’ travel-themed rotating ice cream
promotion is continuing this year as well, again with Northwest Airlines
World Vacations and a new series of globally inspired flavors. The program
was extended, says Melo, because of the success of last year’s
effort. “It was a really effective promotion for us and we learned a
lot from it,” she says. “We’d never had a partnership
like that with a non-food company and they had wonderful resources, which
were the trips. We could award trips on a national level and on a specific
level, like a trip a customer could win by using their EZ-Save card at a
particular store.”
Dean Foods’ Meadow Gold brand also relies
heavily on promotions to reach consumers at different venues, from the
dairy case to local special events. “Because the Southwest Region of
Dean Foods consists of 16 strong regional brands, it is imperative that we
develop campaigns that continue to build on their heritage, community
commitment and loyal consumer following,” reports Meadows.
Two recent regional promotions earned Meadow Gold
nods from IDFA. The company won for Best Ethnic Marketing Campaign for its
promotional efforts in Utah, including teaming up with the local
“Miss Latina” personality. “Our Latino/Hispanic campaign
for Utah was developed in response to how the marketplace was evolving.
With an ever-growing Hispanic population there, Meadow Gold’s Miss
Latina campaign was a sure way we continue the local brand message while
appealing directly with a celebrity in the Latino/Hispanic
community,” explains Meadows, adding that coupon distribution and
community events were successful aspects of the promotion. “We are
always trying to come up with some new ways to market, rather than just
Hispanic billboards or Univision or Telumundo (networks).” IDFA also
honored Meadow Gold for Best Butter Promotion for the company’s
“Butter Cow” event at the Utah State Fair, a butter sculpture
that drew large crowds and media attention.
The processor is also launching a marketing
campaign in Las Vegas in conjunction with the opening of a new processing
facility there later this year.
As for the future, marketing campaigns will likely
evolve into more integrated programs with many tailor-made elements, for
different consumer segments, media channels, retailers and foodservice
accounts. Just as in the previous decade, marketing programs are sure to
hinge on innovations on the product, packaging and distribution aspect of
the business, spurred by processors and industry groups alike “There
is still an enormous way to go, we have to work better nationally and
locally,” notes Graetzer.
For her part, Meadows believes dairy marketers are up to the
challenge, pointing to the enormous success of the development and marketing
of single-serve milks. “No longer just a commodity, single serves must now walk
tall among the carbonated soft drinks, bottled water and juices,” she says.
“There has been a real learning curve associated with marketing this product
line, but the opportunities are great and rewarding.”
Lynn Petrak is a freelance journalist based in the Chicago
area.
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