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Kraft Foods - Case Study
Transcript of Kraft Foods - Case Study
Advertising to Children Done by: V. Vitkutė & Liepa Olšauskaitė IBC III Table of Contents
Main issues at stake
Advertising to children
Promoting unhealthy lifestyle
Regulations and business ethics
Discussion Kraft Foods Inc.
2nd largest in the world
When it all began... 1903
Now operating worldwide
Brands How we behave.
We understand that actions speak louder than words, so at Kraft Foods:
We inspire trust.
We act like owners.
We keep it simple.
We are open and inclusive.
We tell it like it is.
We lead from the head and the heart.
We discuss. We decide. We deliver. Troubles in advertising:
Cereal ad focus on premiums
"We will reduce portion sizes...NOT"
False promises to stop ads for kids Outcome - loosing costumer trust Case setting 2002 Mclawsuit - planting seeds for problems... 2004 Kraft Foods executive meeting Main issues at stake:
Marketing to children
Promoting unhealthy food Quick facts Direct effect:
Teens spend 180 billion a year
Up to age 11 spend 18 billion a year
Tweens (8-12 year) influence 30+ billion parent spending
Under 12 influence parental purchases totaling 130-670 billion
50% of parents agree to buy something in order to avoid an argument Healthy lifestyle at stake? 1980s Now Global Advisory Council in for the help "Sensible Solution" labeling programme Own perspective... Trust problem
Efforts in question
Shareholder - Philip Morris Example
Study done by the Medical College of Georgia:
29 children (9-12 years old) VS. Result:
"clinically proven superior hydration benefit compared to water" What about freedom of choice? "What people eat is ultimately a matter of personal choice <..>" Roger Deromedi, Co-Chief Executive, Kraft Foods Inc. in July 2003 “In free market capitalism individual is the key element. Its individual who has responsibility. It is not the government, not the theory, its the people who have it.” Milton Friedman 2004 Harris survey - intelligent choice? Tackling the problem Regulations help?
Example Countries Other business sector Video game industry (cc) photo by medhead on Flickr Communication is the Top food brand in UK (Cadbury success) The 2012 Harris Poll Annual RQ Public Summary Report The paradise of childhood is green the color of Transferability Sweden Australia Centers for Disease Control and Prevention 17% What's in it for me? Three markets: direct, indirect and...? ...Future Market "If you own this child at an early age... you can own this child for years to come"
(M. Searles) Evolution of Child Consumer Year 1 Accompanying Parents and Observing Year 2 Accompanying Parents and Requesting Year 3 Accompanying Parents and Selecting with Permission Year 5 Independent choices Year 8 Year 12 Is it true...? Made to sell Marketing strategy Indoor Outdoor Educational institutions
Licensed characters Example: Reputation Shareholders Customers Government Suppliers Media Parents Children 8 50 Supporting Fair-trade:
20% of Dairy Milk profits for solar panels
Empower producers to reach long-term goals Media/information literacy:
small fraction of profit
argument for children advertising Customization - new targets
Discovered specific tastes
Adopted advertising/communication campaigns Health for Life initiative:
sporting and cultural activities
"Big fork little fork"
Kraft Food Recipes
London Olympic games:
Spots v Stripes campaign
1 pound invested 1.9 pound for return One more small mistake... Mondelez = World + Deliciousness "Make today delicious" Issue1:
Advertising to Children Issue2:
Promoting unhealthy lifestyle Introduction Business Ethics
Regulations Stakeholders Conclusion Stakeholder management Miscommunication Lithuania Oral sex Outcome Loss of customer trust
Attempts to enhance image
Effective stakeholder management
Regained trust Discussion 1.To what age group is this advertisement addressed to? What message does this ad send? Is it ethical?
2.Should the companies self regulate or be restricted by the government in terms of advertising?
3.Which areas should be developed by Kraft Food Inc according to RQ? What are your suggestions? "If marketing is a dirty business, the marketing to children is the dirtiest bit of the dirty business." Meeting needs vs creating needs
Criticism Australian Communications and Media Authority (ACMA) Study by Nunwood Ethical business controversy
Critics view (costly)
Profit or loss?