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Pumped-Up Marketing Boosts ConAgra
Jun 30, 2009

Consumer driven recessions prompt various behaviors by Consumer Product Companies. In the late 1920's, two companies—Kellogg and Post—dominated the market for packaged cereal. It was still a relatively new market: ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the twenties. So, when the Depression hit, no one knew what would happen to consumer demand.

Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player.

ConAgra adopted a similar approach during this recession.  In a MarketingDaily story it is reported that "that they significantly improved and increased marketing contributed to strong double-digit growth for Healthy Choice, Marie Callender's, Banquet and other consumer brands during ConAgra's fiscal 2009 fourth quarter", the company reported.  At a time when the economy is shaking Brand Loyalty,  when more than half of consumers who were highly loyal to the average CPG brand in 2007, either reduced loyalty  or completely defected to another brand in the same category the following year according to Catalina Marketing.



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