Milk Ads, Genious!!

VERSUS

In September of 2006 Stephanie Thompson reported for the Advertising Age magazine on how General Mills planned on competing with its competitior, Kellogg's.

In this year General Mills decided to try and take a stab at Fruit Loops $142 million franchise by creating their own fruity O's and attaching that to their brand name Cheerios.

Cheerios has been a well respected brand with General Mills for over 50 years and they thought that if they put the trustworthy name of Cheerios with the fruity look they could steal some customers. And how do you think they went about doing that?! They hit Kellogg’s where it hurt, and advertised on the milk cartons.
Since 70% of all decisions on food are made at the store General Mills thought that there could be no better way to advertise than to post their new product with its favorite companion, Milk! The ads had $1 off coupons for the cereal and displayed the new Fruity Cheerios logo.
After this battle began, Fruit Loops dropped in sales 2.2 percent which is a pretty big margin for how much they were making. So, even though General Mills products never reached the same level of income and stature as Fruit Loops, it did show what can be accomplished from smart advertising.
I personally think this is a genius idea. Because honestly the idea of Fruity Cheerios sounds really gross to me but if they were being advertised with milk I would be more likely to change my mind.
The only problem General Mills ran into was wearing the Cheerios brand name to thin.
“Moreover, there's a danger in overextension. Although "Cheerios is their crown jewel, an extraordinary franchise that's almost impenetrable," an executive close to the category said, continually extending the franchise may strip away its equity.”
This article is an interesting look at the inner workings and sort of battles between the companies. It’s interesting to see what they will do to take some of the others profits. So even though General Mills portrays themselves as an innocent and helpful company, we all know that no company really likes its competitor and friendly competition keeps the product quality higher and better for us as the consumer!

Cost, Price, and Sales go UP!

In September of 2007, Matt Mckiney reported for the Star Tribune in Minneapolis Minnesota on the rise in price for cereal costs and the earnings of the company.

When the cost of corn went up, General Mills wasn’t sure how to prevent cost increases so they ended up making the boxes smaller. It was not something they were excited about doing, but with record prices on all of the commodities going up there wasn’t much else they could do without making each box more expensive.

“Earnings for the quarter ended Aug. 26 were up 8 percent to $289 million, with earnings per share of 81 cents, one penny more than consensus analyst estimates. The company reaffirmed its earnings per share guidance of $3.39 to $3.43 per share for the year.”

These numbers show that although they did have to shrink their product in size to accommodate for price, it was most likely the right thing to do since their stocks continued to rise after this all took place.

Although the cereal prices were the ones to take the biggest hit, General Mills also saw small increases in some on their other products such as their yogurts and a few bakeries.

“The yogurt results were "a little bit disappointing," compared with the generally positive numbers elsewhere in the earnings report, said William Frels, who manages mutual funds with 1.6 million General Mills shares at Mairs & Power Inc. in St. Paul.”

These results most likely come from the fact that the yogurts suffered from an actual price increase as opposed to small product reductions and it is clear which is more effective.

This article has helped my research by showing what General Mills in a crisis such as this and it seems that they handled it well. That is encouraging to me since I wasn’t as impressed with the way they handled their last crisis with the Eggo Brand.

L'eggo my Eggo!

In August of 2007 the Star Tribune reported General Mills decision to decide to cut the production of their frozen waffle industry. Sales had plummeted from $63 million to under $23 million in just one year with most of the money coming from Pillsbury’s frozen foods.

“The drop came in a relatively flat industry. Frozen-waffle sales have grown by just $10 million since 2003, but the $521 million in annual sales, for the most recent 52-week period, is dominated by Kellogg, General Mills' archrival and owner of the Eggo brand. Kellogg holds a 71 percent market share in frozen waffles.”

They ended up laying off over 100 employees in the factories and had to take away lots of assets.

The article then goes on to describe other layoffs that had happened in the recent past which added up to a little over 500 employees nationwide.

"It's not a fit with our long-term strategy and our overall portfolio," said Tom Forsythe, a company spokesperson.

This information does not really look the best for my company, however it is something that happens in every company and let their employees go over a longer period of time than most would wait so that they could find another place to work.

This article is definitely another side to my company by showing the downside of what can happen when companies get to competitive with each other and in the process end up becoming too confident to the point where they hire to many people along with promoting and producing a product that is not going to sell as much as it will end up costing.

I think that General Mills took a big risk in pushing a product so much that was already so heavily dominated by its competitor and it ended up in a bad situation for all parties involved.

General Mills takes Care of their Computer Nerds!

“The Minneapolis-based General Mills Inc., which is known for popular brands such as Yoplait and Wheaties, keeps finding new ways to reward its IT workers.”

I’ve always thought through my research that General Mills would most likely be a great place to work when they seem to have such great business ethics along with cares for their consumers. In June of last year “Computerworld” a magazine based for IT workers posted a list of 100 greatest companies to work for, and what do you know! General Mills was on the list!

This would seem surprising since IT workers aren’t exactly the people who would come first in your mind when thinking about General Mills workers. But, after analyzing their website over this semester I think that it makes sense for them to have such a high class IT department.
Their website it extremely easy to navigate with hardly any errors and updated very frequently. For a food company they really see the importance in having up to date information on their webpage so that in case their customers care, they can know as much about what they are eating as possible.

The fact that General Mills is a great place of IT workers says a lot to me that General Mills genuinely cares for everyone under their umbrella of a company and wants all employees to have great benefits and good incentives to stay with them.

This will help in my argument by showing that not only does General Mills look out for their consumers, but also those of all of their employees. Employee treatment is a big deal in today’s society and I’m proud to be able to say that mine has made almost every list published for most ethical, and best companies to work for.
Yay General Mills!

Corporate Social Responsibility

This website is the Corporate Social Responsibility publication for General Mills for this year. It talks about what that means to them and how they are achieving their ethical goals each year. This year it stated that:

“In keeping with the company’s 2007 pledge to not advertise foods containing more than 12 grams of sugar per serving on programming targeted to children, all of our Big G kids’ cereals now meet that requirement”

That is just one of the great ways they have decided to be as ethical as possible and really shows them moving in the right direction.

“Our mission is Nourishing Lives – to help make lives healthier, easier and richer. That mission expresses not only what we do, but why we do it”

That is the type of mission that shows that the company actually cares for its consumers. They are unconcerned with beating their competitors and making high profits because they know that if they meet those standards where they are enriching the customer’s life, they will become loyal.

General Mills has been around for over 100 years and has over 100 different brands. That is such a huge amount to keep up with. But from their publication it is easy to see why they make the list of most ethical companies every year.

This source is really great because it has all sorts of nice facts about what my company is doing. Along with the ones listed above, more than 500 of their products serving sizes are under 100 calories, discusses its great promotions such as Que Rica Vida, and its Box Tops initiative.

As if that wasn’t all great enough to hear, the publication also has sections on the environment, philanthropy, and cancer research. It is easy to see from this that General Mills really has their head in the right place and works hard to not only please their company but everyone worldwide. This is just another great source that will help with proving how amazing they are!

Cheerios Beat the Tiger!

VS.

In June of 2005 Advertising Age showed that Cheerios sales completely dominated the sales of poor Tony the Tiger!
It seems that the reign of “Tiger Power” was pretty much over by the time these statistics were posted. In the end Tiger Power made a small $3.4 million, compared to Cheerios $550 million. That is such a huge huge huge difference that I can’t even get over it. It seems that Cheerios is a sort of staple in the household that can’t be replaced and can’t be changed.

Kellogg’s plan to keep trying to compete with General Mills seems to be one of adding more marketing. But what I think seems to be the problem is that Cheerios is a legend, and frankly I think that Tony goes with Frosted Flakes and that’s where he belongs. If people associated him with too many things then people will start to get confused.

A disappointed Kellogg’s retail exec stated that, "I don't think they've made a case for people to switch from Cheerios," he said. "I'd call it Tiger Pooper." That seems like an extremely bold and disappointed statement to be coming from the producing company! I’m somewhat in shock that they were not more diplomatic in their approach to discussing it.

Below is the chart sales and it is just unbelievable to see the difference. Tiger Power did not even have enough sales to cover their advertising initiative of $7.1 million.

GENERAL MILLS SALES

Cheerios $290 million
Honey Nut Cheerios $246 million


KELLOGG SALES

Tiger Power $3.4 million

This article is important in my argument because it shows that different companies can’t really reinvent each other’s products. General Mills tried the same sort of thing with Fruity Cheerios, and although their success was much bigger than tiger powers, it still could not touch the Fruit Loop giant at Kellogg’s. Companies need to stick to what they make best and not try and confuse their consumers by trying to outdo each other. I think this is the perfect example of this sort of behavior and it seems almost silly to me.

"Que Rica Vida!"

In June of last year, General Mills started a marketing initiative called “Que Rica Vida” which was aimed at a Hispanic women audience and stressed the importance of nutrition. The reasoning behind making Hispanic women the audience is because they are still generally the heads of the household when it comes to food and snacks! This initiative included a website, magazine ads, and nutrition lessons to over 10,000 people at local community centers so that they could help combat the Hispanic health challenges.

In general, people of Hispanic descent suffer more from above-average rate of obesity, diabetes, and cardiovascular illnesses.

“To help Hispanic families prepare nutritious meals, General Mills developed a curriculum of 10 monthly lessons in both Spanish and English, including recipes developed for the program from the company's Betty Crocker kitchen, and training for the instructors from the community centers at General Mills' headquarters in Minneapolis”

Some of these lessons included, “How to be a Better Grocery Shopper,” and scavenger hunts to the grocery store to pick out better choices for meals. At the end of the lessons coupons and products were distributed to the ladies for money off General Mills products.

This might look to some like a sneaky way to push their brand, but I disagree. General Mills was helping people by also helping themselves. This article will help me by showing all the different sides of America that General Mills targets and genuinely cares for their well being.

Some of the women might not have been able to afford all of the higher quality products without the coupon and if General Mills is sponsoring the events than it ends up being a win-win situation for everyone involved.

I personally love this article also because it plays to a multicultural audience that I think most companies forget about and it is so important in this day and age to realize how diverse America is really becoming. I’m proud of my company for seeing it first!