Warc, 9 August 2013
NEW YORK: Mondelez International, the snacks company, is focusing its marketing spend on the brands that are "the future of the company", a strategy benefitting Oreo, Cadbury and Milka.
The firm reported that its organic sales rose by 3.8% in the last six months, a figure that climbed to almost 8% for its stable of "power brands".
Within this group, Oreo, Tuc/Club Social, belVita, Barni, Cadbury Dairy Milk, Milka, Halls, Stride and Chips Ahoy! all registered double-digit growth.
Speaking on a conference call with analysts, David Brearton, Mondelez International's chief financial officer, reported that its investment would continue to be biased in this direction.
"There is simply a matter of focusing on the brands that are going to be the future of the company and spending less support on the secondary and tertiary brands," he said.
Many of the offerings not currently at the spearhead of Mondelez's strategy, Brearton continued, have seen sales remain largely flat in the last two or three years, a trend likely to continue going forwards.
"There are just smaller brands in markets that just don't have the scale over time," he said.
Although marketing expenditure as a percentage of sales remained largely unchanged year on year at 9.5%, this masked a geographic shift in Mondelez's strategy.
"Within our mix we're spending a lot more in emerging markets and we're a little tighter in the developed markets," Brearton said.
Irene Rosenfeld, Mondelez's chief executive, also provided an insight into how it had made tangible changes in the gum sector, from improving in-store displays to pushing innovative new products.
"The issue for us is just making sure that we've got the right marketing mix within that spending … Some of our marketing spending we were not feeling was as effective as possible," she ad.
"Some of the campaigns had gotten a little bit too esoteric and we've brought them back to the fundamental category benefits of breath-freshening as well as oral care, and finally we're getting a good response to that."
Data sourced from Seeking Alpha; additional content by Warc staff