By Published on .

Scott Kulok remembers distinctly the cloak of secrecy surrounding the filming of a Kraft Foods commercial for Post cereals announcing the category-shaking April 1996 price rollback.

"It was top secret, like an armed camp," the creative exec VP at Grey Advertising, New York, said of the commercial's shooting, which was done at a Post plant in rival Kellogg Co.'s hometown of Battle Creek, Mich. Post feared if news got out early, it could affect parent Philip Morris Cos.' stock price, he said.


"After all, we were changing the way the entire cereal category works," he recalled.

Change the category it did, but 18 months later it's not clear whether the dynamics of the shift have been for the better.

"It reminds me of one of those World War I battles where there's all this firing but when the smoke clears you can't tell who's won," said analyst Bill Leach, with DLJ Securities, New York.

According to Mr. Leach, although there have been some share spikes for Post during the past 18 months, the net result isn't impressive: "They had a 15.7% share in January '94. Now it's 15.9%. You can't say it's a hell of a lot of progress."

Information Resources Inc. reports Post's share by unit volume was down 2.1% for the 52 weeks ended Oct. 5.

But Post begs to differ. Kraft Exec VP-General Manager Cereals Tim Callahan maintains the rollback and so-called "Portraits" ad campaign starring employees devised by Grey hiked its share of ready-to-eat cereals from 15.3% before the price increase to 17% today. He added that category volume also has jumped 1% since April '96.

Moreover, Mr. Callahan said the campaign has had other, less tangible benefits. "What ultimately drives it is the strength of people's sense of connectedness to the brand and its relevance," he said.

That good will is especially important considering how vociferously consumers had been resisting rising cereal prices before the Post rollback.

Post is playing in a mighty tough ballpark, an $8 billion category at retail with, by one estimate, as many as 240 different brands/brand styles on the shelf, many backed by multimillion-dollar ad campaigns.

Indeed, there was a feeling of much importance around the secret project, which saw Post calling in Grey to compete with Foote, Cone & Belding, New York, for an unofficial winner-take-all shoot-out for the rollback ad campaign.


The temptation was to unveil a noisy effort trumpeting the price cuts -- Kellogg, for example, when it followed Post's cuts, showed Tony the Tiger's paw slashing a UPC code in ads from Leo Burnett USA, Chicago. Grey had another idea. Its "Portraits" campaign would show employees talking in a folksy manner about how prices had gotten out of hand and how Post was aiming to bring them back in line.

The spot also focused on Post's "universal" coupon, an innovation offering money off any Post cereal rather than a specific brand.

There were glitches along the way. About a year into the campaign, two major executives featured in it -- Post Development Director Margo Lowry and Mark Leckie, Mr. Callahan's predecessor and the architect of the rollback strategy -- left for Campbell Soup Co.

As the campaign evolved, the talent focus shifted from main-office executives to factory workers.

Grey's first big challenge came with the introduction of Post Cranberry Almond Crunch. The TV commercial the agency had devised when the product was in test -- an engaging but glitzy commercial featuring a cranberry doing the tango -- simply didn't fit with the new homespun Post image. The challenge was to target the brand to a cereal consumer seen as more adventurous and daring without harming that image. And to complete it in less than a month.

The result was an employee-focused spot good-naturedly jibing about the Cranberry Almond Crunch's zing with lines like, "This is no bowl of Raisin Bran."

Since then, the ad formula has been adapted for regular, Honey Nut and Frosted Shredded Wheat ,and other new Post cereals. The employees even appeared in a spot for Post's 100th anniversary.


It's hard to assess exactly what the rollback and "Portraits" campaign have accomplished.

"lt's always easiest to be the cheapest brand," said Chet Kane president of consultancy Kane Bortee & Associates, New York. "But price is not something you can base a franchise on."

"It's great when you say you've cut prices, but it raises the question with consumers, 'Weren't you charging me too much before?' " said Burt Flickinger, consultant with Reach Marketing, Westport, Conn.

"Usually [price cuts and an umbrella campaign] allows you to reinforce your current customers but won't gain you new users," said Clay Timon, chairman of image and brand consultancy Landor Associates, San Francisco.


Mr. Timon, a former package-goods marketer, said the disarray in the category can be traced to too few truly new products, noting consumer interest in cereals moving to other breakfast products such as bagels and muffins.

"It's not just price," said DLJ's Mr. Leach. "People are bored with cereal. The category has no vitality."

Although only General Mills has raised prices, the only players in ready-to-eat cereal showing growth even 18 months after the cutback are Quaker Oats Co., with its bargain-basement priced bag cereals, and store brands.

The price rollback also carried another cost -- ad support.

Before prices were cut in April '96, Post spent $123 million on advertising cereals from April through December 1995, with support falling 34% to $81.3 million for the same period in 1996, according to Competitive Media Reporting.

The cuts weren't as severe at Kellogg, where ad spending was $232.9 million for first eight months of 1996, but dropped 17.7% for the same period in 1997.

Even Big G, after raising prices, has continued in an ad spending slump, with outlays of $128.8 million for the year through August, down 12%.

"There also wasn't a lot of merchandising to support the price rollback," Mr. Flickinger said. Post and others "didn't provide the necessary trade merchandising support and didn't get the displays."

He opined that efforts the cereal millers are now doing -- from a joint breakfast promotion for Post among all its morning brands to Kellogg's campaign promoting cereal in general as important for healthy eating -- is more likely to invigorate the market.

But Mr. Callahan said cutting spending was necessary to fund the price cuts, noting that it comes down "to a balance."

Mr. Kulok said the campaign has been a "significant driver" of good results and he's particularly proud that the final product "didn't scream price."

"For these spots there are no storyboards and we run around in four different Post plants casting," he said. "The whole process has gone to hell and we wouldn't have it any other way."He's the one: Roger Sawdey nearly missed his shot at cereal stardom.

A star is born in Naperville

If the Post "employee" campaign has created an in-house star, it's Roger Sawdey. He has appeared in at least five TV spots, including one with his two daughters.

Mr. Sawdey, an employee at the company's Naperville, Ill., plant, nearly missed out on the opportunity altogether.

He was vacationing when Grey Advertising executives were trying to cast their first commercial for Shredded Wheat, acquired from Nabisco Foods. They wanted a longtime Nabisco employee, but one who was personable enough and not too old. After an exhaustive search, they were ready to give up.

"I had to call Mark [Leckie, then Post president] and tell him that if one of three guys on vacation doesn't pan out, we're in trouble," recalled Grey Exec VP Scott Kulok.

Mr. Sawdey was one of the three and he panned out.

"Roger is like a studio player," said Mr. Kulok, noting that "we can now sit down and write a script for Roger like that."

The "Breakfast made right" campaign also has done right by Mr. Sawdey, who now

Most Popular
In this article: