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03 SGgot Milk Vf

03 SGgot Milk Vf

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Published by bajracharyasandeep

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Published by: bajracharyasandeep on May 28, 2009
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01/28/2011

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got milk?:BRANDING A COMMODITY 
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INTRODUCTION
“got milk?”—one of the most popular ad campaigns of the 1990s—wasborne of necessity. In February, 1993, Jeff Manning, newly appointedExecutive Director of the California Milk Processor Board (CMPB), wasreviewing reports on per capita U.S. consumption of milk over the lastfifteen years. To anyone involved in the production and sales of milk,the numbers painted a disturbing picture. There had been a steadydecline in milk consumption over the previous two decades andrecently the decline was accelerating. Manning only had a $23 millionbudget to make milk’s message heard among the noise. To revitalize sales of a product in seemingly perpetual decline,Manning and the ad agency Goodby, Silverstein & Partners developedthe “got milk?” campaign. The campaign was based on a “milkdeprivation” strategy that reminded consumers how terrible it was tobe without milk with certain foods like cereal, brownies, or chocolatechip cookies. Consumers in California responded positively to thecampaign, embracing the quirky ads and also consuming more milkthan if the rate of decline had continued. The campaign was licensednationally and “got milk?” soon became a catchphrase all overAmerica. “got milk?” was successful in California and reversed thesales and consumption slide, while consumption levels continued todecline nationally. Critics applauded the campaign’s success inCalifornia, but as “got milk?” entered its twelfth year, somequestioned how long the “got milk?” campaign could be effectivelysustained.
THE DAIRY INDUSTRY 
 Three major groups make up the dairy industry: 1) Farmers—whoproduce the milk, 2) Processors—who convert raw milk into whole andlower-fat milk, and 3) Retailers who sell the final product. There aremany groups representing farmers and processors in the UnitedStates, including several national milk boards and many regional,state, and local groups. As of 2003, the U.S. milk industry had reacheda value of $23.1 billion and milk remained the most frequentlypurchased item in grocery stores.
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Farmers
 There are over 2,100 dairy farms in California that are representednationally by the National Dairy Public Relations Board (NDPRB) andthe United Dairy Industry Association (UDIA), and locally by theCalifornia Milk Advisory Board (CMAB). Funding to support thesegroups and their advertising programs comes directly from each of the
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farmer’s profits. As a result, farmers are traditionally tight-fisted andscrutinize all program budgets carefully.
Processors
 The processors’ primary function is to transform raw milk into theproducts that ultimately hit the grocer’s shelves, e.g., whole, 2%, 1%,and skim milk. There are 40 processors of fluid milk in California, eachemploying hundreds of people. Concerned about declining sales andconsumption, the processors joined forces to create the CMPB.
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Retailers
In the early 1990s, Safeway and Lucky food stores were the twoleading retailers in California. Fluid milk was one of approximately50,000 products sold at these retailers but extremely profitable.According to the
Progressive Grocer 
’s 1992 Supermarket SalesManual, milk was the top-selling supermarket product per shelf foot. The dairy department racked up a total of $61.23 per square footcompared to the average of $22.47 per square foot. In addition, directprofit return on inventory dollars, an important statistic for storemanagers, averaged $84.83 compared to the department average of $5.
Other Distribution Channels
 The majority of fluid milk was sold in grocery stores, due in large partto the perishable nature of fluid milk. Convenience stores, schools, andfood service establishments such as McDonald’s accounted for themajority of remaining milk sales. In California, the latest threat to milkconsumption came from the school districts. Prior to 1982, all schoollunches in California included milk. Since then, school children chosefrom five items, including milk, for lunch. The change in school districtpolicy contributed to the 3.8 percent decline in non-commercial foodservice milk volume from 1986 to 1991. The trend was equallytroublesome in commercial food service establishments such asMcDonald’s. Although the percentage of food dollars spent out of home increased to 33 percent in 1991 from 25 percent in 1971, milkdid not enjoy an increase in sales in these types of establishments. Infact, commercial food service milk volume actually dropped 23percent from 1986 to 1991.
California Milk Processor Board (CMPB).
 Consumer research revealed that per capita consumption of milk hadbeen on a steady decline for a number of years. So, in 1993, theprocessors joined together and established the CMPB to fundadvertising and public relations programs with the ultimate goal of increasing milk sales and consumption. The processors agreed tosponsor legislation requiring them to contribute $0.03 per gallon of milk sold in the state in the first year, with slightly smallercontributions in the remaining years of an initial three-year charter forthe CMPB. In the first year, the CMPB raised about $23 million, all topromote fluid milk in California. The CMPB hired Jeff Manning,previously a senior vice president with Ketchum, as executive director.Manning had worked with beef, potatoes, bananas, and eggs incommodity marketing and also brought a wealth of branded productmarketing experience. 
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