'A normal review'
A spokeswoman for the Battle Creek, Mich.-based cereal giant said the company is “reviewing our media-buying practices in the U.S. as part of a normal review to strengthen our execution. We have worked with Starcom for decades and we have confidence in them and are very proud of their work with us.”
She declined to comment further, or to cite other media shops that may be involved in the review. Kellogg said the contest does not include creative responsibilities, which are handled by Publicis sibling Leo Burnett Worldwide.
Starcom could not be reached for comment.
Under new CEO Jim Jenness, Kellogg is looking for ways to cut costs and drive efficiencies to continue the financial momentum seen under his predecessor, Carlos Gutierrez, who was appointed U.S. secretary of commerce in December. Following a path of higher marketing spending carved out by Mr. Gutierrez, sales grew 9.1% to $9.6 billion in 2004.
The move comes as Kellogg’s longtime cereal rival General Mills makes clear its plan to boost marketing spending by double digits and to drive promotions of its cereal brands, which recently faltered as a result of price hikes.
Call to action
An executive close to Kellogg said the company’s sales representatives have been given a “call to action” to finish the year strong with higher-than-usual fourth-quarter trade efforts and promotions to combat General Mills’ efforts, as well as an increasingly strong showing from Kraft Foods’ Post brands.
While analysts have been positive recently on Kellogg, with upgrades from Morgan Stanley and Lehman Brothers, the stock has remained relatively flat.