As it did this year, the No. 2 brewer plans in 1998 to back its core Lite and Genuine Draft brands with big-ticket ad campaigns. It also will employ discounting, although probably to a lesser extent than in 1997.
Miller, a unit of Philip Morris Cos., will augment these efforts by directing more advertising efforts at Latinos and boosting campaigns for some of its smaller brands, including High Life, Icehouse, Milwaukee's Best, Foster's and Molson.
STAYING THE COURSE
"Our strategy in 1997 has worked well and there will be no significant changes in 1998," said Jack Rooney, VP-marketing for Miller, in an interview with Advertising Age.
This is a change from recent years in which Miller pinned its hope on new products, culminating with the costly and failed launch in 1996 of Miller Beer. This year the brewer has increased both profitability and share by focusing on its core Lite and Genuine Draft brands.
Through the first three quarters of 1997, operating income was up 4.6% to $410 million. The brewer's overall share of the market grew 6% to 25.2% through Sept. 14, according to Information Resources Inc.
"They accomplished what they set out to do," said PaineWebber analyst Emanuel Goldman. "They jump-started the business."
Miller wholesalers are glad the brewer has decided to focus on core brands rather than diffusing its efforts over a portfolio of new launches.
"We were getting to be the beer-of-the-month club," said one relieved California wholesaler.
To further build on its gains, Miller plans to direct advertising at the hotly contested Latino markets in southern California and Texas, Mr. Rooney said. The brewer plans to run some Spanish-language Genuine Draft spots in California and spots for Lite in Texas.
Marti Flores Prieto & Wachtel, San Juan, Puerto Rico, will handle the Genuine Draft Latino work while Lucero Bentz, Dallas, will handle Lite. Marti will do ads in keeping with the gritty mainstream campaign by Wieden & Kennedy, Portland, Ore., and Lucero will be take its lead from the wacky work Fallon McElligott, Minneapolis, does for Lite.
The brewer also intends to ramp up ad support for its smaller brands, including High Life, which currently does not have an assigned agency but is expected to go to Wieden (AA, Sept. 1). Miller also is planning to redesign the packaging.
Miller also intends to bump up support for Molson and Icehouse, handled by Y&R Advertising, New York; Foster's, at Angotti, Thomas, Hedge, New York; and Milwaukee's Best, handled by Square One, Dallas.
Integrating promotional efforts more closely to its advertising is another goal. Miller recently stripped its roster of six promotional agencies down to two: Zipatoni, St. Louis, for consumer promos and GMR Marketing, Brookfield, Wis., for entertainment and sports marketing.
NO BUDGETING CHANGES
Despite all these initiatives, Miller plans to be working with a budget comparable to its current one and to maintain aggressive spending behind Lite and Genuine Draft, Mr. Rooney said.
Miller's total ad spending during the first six months of 1997 rose 4.6% to $139.1 million.
Miller spent $80.1 million advertising Lite during the first six months of 1997, up 48.1% from the year-earlier period. It spent $41.6 million on Genuine Draft, up 262%.
Miller also is sticking with last year's decision to devote more resources to national, rather than spot, TV buys for its Lite and Genuine Draft brands (AA, Oct. 14, '96). Miller spent $93.2 million on network TV during the first six months of 1997, up 28% from the year-earlier period, according to Competitive Media Reporting. Spending on spot TV fell 39.9% to $16.4 million.
Besides advertising, pricing has been a key ingredient behind Miller's success in 1997.
According to Chris Moore, VP-sales, pricing's importance will continue into 1998.
Miller worked with pricing on a number of fronts in 1997. Although it raised prices in many markets, it held tight in Texas and some Midwestern states; rolled back prices in some Northeastern markets where the price tags of Miller brands were bumping close to those of craft brews; and launched aggressive price promotions in many markets.
The pricing moves were made after evaluating the brands' marketplace positions and working with ad efforts to spur interest in Lite and Genuine Draft.
Mr. Moore said the brewer would continue to run tactical pricing promotions, although the level might be reduced because of potential increases in