KELLOGG DEMANDING 'SIGNIFICANTLY BETTER ADVERTISING': JAQUES -- BATTLE PLAN: CEREAL MAKER GIVES AGENCIES A FREER HAND CREATIVELY

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The management upheaval might be over at Kellogg Co., but the upending of its marketing philosophy and execution has only just begun.

"We want to win again," said Fred Jaques, exec VP-general manager, ready-to-eat cereals, at Kellogg USA, which has come close to losing its once-undisputed leadership position in the category.

In a rare interview, Mr. Jaques said the beleaguered company's recovery is already under way, powered by smarter product introductions, a stronger spending commitment and a freer creative hand for its ad agencies.

"My mandate in this job is to bring energy and growth back to Kellogg. That means significantly better advertising," he said.

Not that Kellogg hasn't sought the best output before. Mr. Jaques was intimately involved with a review of its $400 million general-market account at Leo Burnett USA, Chicago, and J. Walter Thompson USA, New York, in September that saw the Martin Agency, Richmond, Va., join Kellogg's roster. And this year, Kellogg demanded-and received-a new team at JWT, but not before shifting two of its assignments to Burnett.

"The upheaval was necessary," Mr. Jaques said, adding, "we're now settled."

STRAIN SUBSIDES

Kellogg's agencies said the strains-played out against a housecleaning of more than 500 employees at the marketer's Battle Creek, Mich., headquarters and the naming of a new president, Carlos Gutierrez-have subsided.

"If you're in a relationship for that long, there will always be different times when different people feel pressure," said Clive Sirkin, senior VP-U.S. director of the Kellogg business at Burnett.

What is evident is that Kellogg, to borrow a line from a current campaign, is reshaping its attitude toward advertising.

"I want our advertising to be talked about. There's too much 'I've seen that before' [in the category]," said Mr. Jaques, formerly exec VP-marketing. "It's too competitive and too cluttered."

Because "the functional benefits [of cereal] are the same" from brand to brand, Mr. Jaques said Kellogg is refashioning its ads to create a personality for each brand-and a relationship with their consumers. That's visible in some recent efforts, such as the current one for Frosted Flakes featuring Tony the Tiger groupies and the Special K ad that gently satirizes women's obsession with their weight.

Although both of those were created by Burnett, the same undercurrent runs in JWT's recent efforts. Kellogg's advertising for Smart Start has successfully wooed young, active adults (see story below).

NEW ATTITUDE AT KELLOGG

John Clinton, the JWT chairman who three months ago took over as exec VP-director in charge of the Kellogg account, cited that campaign as an example of the new attitude at Kellogg-he and his team pitched it without using storyboards; Kellogg saw only computer presentations before giving the go-ahead.

"There's a real focus on pulling the true benefits out of each brand," Mr. Clinton said. "Kellogg is a great master brand, but the difference comes in understanding each of the [individual cereal] brands."

The new aggressiveness extends beyond advertising alone, with Mr. Jaques noting the company is looking at radically improved products, new packaging and nutrition-oriented lines.

"We're stepping up our lead," he said, pointing out that in the past Kellogg did too little to address the stampede away from dry cereal into more convenient breakfasts, such as bagels.

Low spending levels also will be corrected.

"In 1998, the industry spent 30% less on advertising than it did in 1994," Mr. Jaques said, opening the door for "the onslaught of private label. . . . We have to get back to '94 levels. We can't do that in a year, but we're doing it as quickly as we can."

$100 MIL MORE FOR MARKETING

Kellogg has told financial analysts it will put an additional $100 million toward marketing this year.

Some of that will go for new Raisin Bran Crunch, with introductory ads from JWT breaking today, and the launch of Country Inns, a line of niche cereal products that will be supported with a campaign themed "Go someplace nice for breakfast," beginning in late April.

Those spots also from JWT, will make heavy use of inn-type imagery such as rocking chairs, verandas and afternoon teas.

Also planned are new efforts for Mini Wheats and Corn Flakes (both Burnett) later this summer. The company is also tinkering with the pitch for its Breakfast Mates cereal-and-milk "kits"-because "to be candid, [sales] were a little below expectations," Mr. Jaques said.

That has improved in the first quarter, especially since Kellogg moved Breakfast Mates to supermarket shelves next to milk.

LONG CLIMB AHEAD

The new efforts all have helped Kellogg inch up its share, although the ultimate climb may be a long one.

"I always hesitate to celebrate, but we have slowed our baseline volume decline," Mr. Jaques said, although it is not yet posting new growth.

Mr. Sirkin said Kellogg realizes "an aggregate brand is the face of Kellogg. In the past, there was a greater likeness between the brands, so the face of

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