|Agency: Foote Cone & Belding||Author: Tim Broadbent|
Marketing in a commodity industry: The launch of Californian Raisins
This case history describes the creation of a brand in a large commodity market.
The California Raisin Advisory Board, with the help of funds from the Foreign Agricultural Service (FAS) of the United States Government, launched a spring 1984 advertising campaign through Foote, Cone & Belding for Californian raisins as a generic category and also for the Sun Maid brand. They wanted to test how well consumer-based marketing techniques would work.
America's share of the large UK raisin/sultana market had collapsed (from 12% share in 1980 to 12% in 1983) as the rising dollar pushed up the price of Californian raisins. The marketing objective was to reverse the sales decline and restore lost share, while also maintaining premium pricing.
Qualitative research showed us that people thought all raisins were the same, so they did not mind which sort they bought.
The aim was to make Californian raisins famous and to give them a brand personality which would distinguish them from other raisins. The branding came from a strong product claim together with more emotional elements. The strategy was based on the naturalness of Californian raisins (no artificial additives - the grapes were simply picked from the vines and left in the sun to dry), and the advertising expressed this claim in a lively, bouncy, fun way.
The client, and the FAS, tested the effectiveness of the first burst of advertising by an area test in four TV regions accounting for 45% of households. This showed growth in awareness of Californian raisins and improvements in imagery, particularly on naturalness.
The sales effectiveness of the advertising was tested by in-store research among a major supermarket chain: with static distribution and constant prices, sales of Californian raisins virtually doubled during the advertising (+93%). Brand share more than doubled and household penetration increased by 50%.
Following these good results, the advertising rolled out to four new areas in 1984 and went national in 1985 as distribution improved.
After two years the results were dramatic. Sales of Californian raisins trebled after 1983 and America became the second largest supplier in the UK, with a market share of 16%. This was achieved while maintaining premium pricing. An advertising spend of under £2 million helped produce consumer sales worth over £12 million.
The FAS went on to help fund advertising for other agricultural products after the success of this programme.
This case history is a clean and convincing demonstration of the power of advertising to stimulate consumer demand via brand values rather than cheaper prices.
In October 1983, Foote, Cone & Belding was briefed to produce advertising for a new client with an unusual advertising problem.
The client was the California Raisin Advisory Board (CALRAB), the national association of American raisin growers and producers. They wanted to promote Californian raisins in the UK and throughout Europe - both as a generic category (ie the competition was raisins/sultanas produced in other countries) and also under the Sun Maid brand name.
Sun Maid was the best-known American raisin brand in the UK but, by 1983, its distribution had fallen to around 5% and its market share was described as 'unmeasurable'.
The bulk of Californian raisins for consumer sale went to supermarkets' own-label business.
In an ideal world the recommendation would have been two separate advertising campaigns. But funds only permitted one. Was it possible to successfully advertise a generic category and also a distinct brand, both within the same campaign theme?
Funding came from two sources: CALRAB, and also the Foreign Agricultural Service (FAS) of the US Government. For the first time, it is believed, the US Government would contribute directly to the advertising of branded and generic products in export markets.
The American Government spent about as much on agricultural subsidies in total as the European Economic Community. Historically the money was largely spent on the supply side - to keep commodity prices down. Raisins were seen as a test case. Would money be more effectively spent on the demand side - to stimulate consumer purchase? This was an experiment to see how well it works.
Naturally the effectiveness of the expenditure was to be thoroughly monitored. This paper describes the results of this test of consumer marketing in a commodity industry, and the good results it produced. (Although the programme was European-wide, only the UK results are discussed here.)
THE MARKETING PROBLEM
The UK was the world's largest importer of raisins and sultanas, and had the highest per capita consumption.
This large market attracted many suppliers, including Greece, Turkey, Australia, Afghanistan and South Africa, as well as America.
They competed mainly on price. Total advertising spend on all dried fruits was £45,000 in 1978 and £38,000 five years later (MEAL); an insignificant amount, reflecting the commodity nature of the market.
American raisin prices rose in the early 1980s as the pound lost value against the dollar; moreover, when Greece joined the EC she gained special subsidies which reduced her sultana prices and led to market share growth. Californian raisins were delisted - there was no consumer loyalty to maintain distribution or support the premium.
Consequently America's share of the UK market fell from 12% in 1980 to 3% in 1982, and to 12% in 1983.
The marketing objective was to reverse the sales decline and restore market share, while maintaining a price premium which reflected the high quality of Californian raisins.
THE CONSUMER PROBLEM
The first step was to conduct group discussions among housewives (see Appendix 1 - Research) to understand the causes of lapsing or non-use of Californian raisins in order to define the role for advertising.
People thought all raisins were the same. So they did not mind which sort they bought. When Californian raisins got more expensive people were not loyal but stopped buying them. (In quantitative taste tests, Californian raisins and Greek sultanas were equally preferred.)
There was little knowledge of where raisins came from. Only a small minority (about 15%) knew of California as a supplier. But there was a latent willingness to believe that Californian raisins would be better cleaner, more hygienic, perhaps healthier.
Also, when they came to think about it, people liked raisins. They were a fun, innocent pleasure. They were endearing, faintly ridiculous little things. They were associated with children and childhood - in particular the Sun Maid brand with the little red box, bought (occasionally!) as treats - or school lunch packs or Christmas stockings.
THE ADVERTISING STRATEGY
The aim was to turn indifference into preference. The advertising objective was to convince housewives that Californian raisins were different and better than other raisins; to make Californian raisins famous, with a distinctive advertising campaign, and to create a brand personality which would distinguish them from other countries' raisins.
Consumer reactions were gathered to half a dozen positionings before arriving at the final strategy. These involved processing differences, usage suggestions and end benefit statements.
There was little consumer interest in the process by which a grape becomes a raisin or a sultana. (The essential difference is that Californian raisins are dried naturally in the sun, which takes time, whereas sultanas are treated with chemicals then smoked in sulphur to speed the drying process - hence their yellow colour and greater moisture content.)
Usage suggestions were welcome, but it was feared that cheaper raisins and sultanas would benefit more than the Californian product.
The naturalness of Californian raisins, however, emerged as a credible, relevant and motivating benefit. Consumers were increasingly concerned about artificial additives in food; the trend could be harnessed to the brand.
The right tone of voice was crucial. Raisins cannot stand much in the way of earnestness. Rather than seeming faddish, the aim was to convey naturalness as lively, energetic, bouncy - in a word, fun.
Thus the main message for people to take from the advertising was that 'Californian raisins are the most natural raisins', that they tasted delicious, because they came from California, and so were always clean and hygienic.
The target audience was all housewives, particularly housewives with children, who bought raisins/sultanas. The target was to increase penetration among existing market buyers.
The model for how the advertising would work was a simple one:
- awareness that California makes raisins;
- discrimination between raisins, based on a 'naturalness' claim;
- purchase of Californian raisins;
The research programme was designed to measure these intermediate and sales effects.
THE ADVERTISING CAMPAIGN
Two advertising routes were examined in group discussions. One used a personality presenter, who drew a light-hearted analogy between sunbathing 'au naturel' and turning grapes into raisins.
The other featured a cheerful animated raisin character (referred to within the agency, rather disgracefully, as Ronald Raisin), who was a Californian raisin farmer himself and sang a jolly song describing the natural virtues of his crop. This slightly lunatic approach captured the affection for raisins found in earlier research and gave them personality; creating a brand symbol which could be used in point of sale material, stickers, promotions, etc.
Two executions were filmed: they were identical except for the pack shots, one featuring the Sun Maid brand, and the other California raisins as a generic category.
TV was the sole medium at first. It gave rapid coverage; it was intrusive - important with an unexciting product field and it was a proven brand-building medium for the grocery trade.
The first burst appeared in March/April 1984, around the Easter sales peak, using a mixture of 40- and 10- second commercials in the ratio 70:30. It was a regional campaign, reflecting distribution strengths and also to allow thorough evaluation. London, Yorkshire, Southern and Anglia (45% of households) each received an average of 770 TVRs over seven weeks, split 60:40 generic:branded. Advertising achieved 1+ cover of over 90% of housewives, with an OTS of about 7.5. (Full details are shown in Appendix 2 - Media.)
Most of the research findings relate to the spring 1984 regional burst; not only before and after measurements, but also with and without advertising measures.
EVALUATION - FIRST BURST
Marplan carried out 1,000 interviews with dried fruit buyers before, during and after the spring 1984 advertising. Half the interviews took place in the four advertised regions, the remainder in the rest of the country as a control.
The aim was to create awareness and discrimination in favour of Californian raisins, and the tracking study showed encouraging trends.
TABLE 1: AWARENESS OF AMERICA AS COUNTRY OF ORIGIN
|Advertised areas||Control areas|
Before the advertising, America was no better known than any other producer; after the advertising, awareness had risen to more than double that of the next country to be known. This improvement was confined to the advertised areas.
Brand imagery is slower to change than mere awareness, but it was encouraging that during the first burst of advertising there was a statistically significant increase in the rating of American raisins as 'natural'- this was not the case for any other country, nor did it occur in the control area.
TABLE 2: RATINGS OF AMERICAN RAISINS AS NATURAL
|Advertised areas||Control areas|
There were also improvements during the advertising on the dimensions of being 'good tasting', 'clean/hygienic' and 'for me'; scales relevant to the advertising's objectives.
These good results were confirmed in post-testing qualitative research. The report stated that 'spontaneous mention/recall of the commercial was high, and it was generally viewed very favourably. The funny character was lively and engaging, and the Californian setting provided all the positive values for raisins' (ie healthy, natural, dried in the sun, etc).
There was no formal distribution data until September 1984. In order to allow for the effect of distribution gains, an Inbucon store test was carried out among a major supermarket chain which stocked Californian raisins before, during and after the advertising.
Retail price and display were also constant. So the agency was confident that advertising was responsible for the dramatic sales increase.
As the actual sales figures were confidential, they have been shown indexed on the pre-advertising period:
TABLE 3: VOLUME SALES ON STATIC DISTRIBUTION BASE
The Inbucon report commented that 'the advertising generated a considerable impact on sales. From the commencement of the advertising sales began to rise... the campaign helped in sustaining a relatively high volume during the post-campaign period.'
As for brand share, there was the familiar pattern of a peak immediately after the advertising burst (in March/April), then a fall to a new higher level:
TABLE 4: VOLUME BRAND SHARE (1984)
The FAS commented that 'the position of raisins, especially US raisins has consistently improved. Raisins as a proportion of total raisin/sultana purchases increased from 28% to 36% in the UK. US raisins have increased from about 1%... to nearly 3%. US raisins have nearly doubled their share of pre-packed raisin purchases. One major US brand has increased its share of total pre-packed raisin purchases from 4% to 7%.'
Penetration of American raisin buyers increased by 50% between February and May, even though penetration of the raisin/sultana market as a whole declined over this period. Californian raisins gained many new customers.
These results were considered so encouraging that the campaign rolled out to eight TV regions in Oct/Nov 1984 and went fully national in 1985 following further distribution gains.
RESULTS - TWO FULL YEARS
By spring 1986 there were two full years of the programme of advertising, PR, distribution-building, etc.
The results were dramatic; a UK market in severe decline was turned into the fastest growth market for Californian raisins in Europe:
TABLE 5: UK SHIPMENTS OF CALIFORNIAN RAISINS
Source: Customs & Excise
California's volume share of the market had consistently grown, from 3% (May 1984) to 16% (May 1986). California was the second largest supplier in the whole raisin/sultana market, after Greece.
Distribution had grown, but much of the gain was due to improved rate of sale where stocked; the rate of sale of Californian raisins increased by over 70%.
Sun Maid became the clear brand leader, with 23% of the pre-packed raisin market - more than twice the size of the next brand.
Significantly, Californian raisins grew while maintaining their price premium. This indicated that shoppers were buying more than just raisins; they were buying a brand. The average prices paid are shown below:
TABLE 6: AVERAGE PRICE PAID BY COUNTRY OF ORIGIN
|(£ per kilo)|
|Californian raisins||1.45||(Sun Maid 1.65)|
Source: AGB, May 1986
The success of the programme allowed more Californian brands to be introduced to the UK market, such as Bonner and Champion. New pack sizes were launched. And branded spin-offs started to appear, such as Sun Maid Raisin Bread; other product launches were actively considered.
The exact contribution which advertising in particular made to this success is hard to disentangle from other marketing activities. It was still harder to quantify the profit derived from advertising, though a total advertising spend of less than £2 million. has helped produce consumer sales worth over £12 million.
The hardest evidence for the success of the campaign is that the California Raisin Advisory Board and the US Government continued to fund the advertising after the testing described earlier, and satisfied themselves that advertising was a more productive allocation of budget than the alternatives. The FAS contrived to fund advertising with other agricultural producers.
Marketing works. Sales were up, distribution was up, new brands and new products offered Californian growers additional ways to sell raisins, and perhaps the most telling statistic of all is that the price premium was maintained. This was the major economic justification for advertising - that brand values allowed premium prices.
Exactly how much the advertising helped was hard to quantify. The aim was to create awareness and discrimination, and the research evidence was that we succeeded; this led to increased penetration and extra sales. It would clearly be more expensive to do this without advertising.
It may be that there are many other commodity industries where marketing and advertising techniques would reap handsome rewards. In general terms, this case history is a clean and convincing example of the economic benefits of creating strong brand values through advertising.
APPENDIX 1 - RESEARCH
- Four KTC group discussions (held within FCB)
- 16 group discussions (Cragg, Ross & Dawson, and Hudson, Payne & Iddiols) among housewife raisin buyers; two groups among children
Ad hoc quantitative:
- Marplan Advertising Tracking Study; 1,334
interviews, 1,028 interviews among housewife dried fruit buyers.
- Inbucon Californian Raisins Advertising Campaign Evaluation
Store sales performance
- RBL Taste Test; 166 interviews among dried grape buyers. California raisins vs. Greek sultanas.
- AGB Attwood Consumer Panel: sales, share,
penetration, price paid, source of purchase
- AGB Prices Audit: selling price, distribution
APPENDIX 2 - MEDIA