KRAFT DEVELOPS ETHNIC MARKETING REFERENCE

RUSSELL REDMAN

NORTHFIELD, Ill. -- Kraft Foods here and A.C. Nielsen, Schaumburg, Ill., have developed a new ethnic marketing reference that can help supermarkets with a large Hispanic customer base better serve their clientele.

A spin-off of the measure, created by Nielsen with funding from Kraft, also is being devised to shape merchandising efforts for supermarkets heavily shopped by African-American consumers, said John Bowlin, Kraft's president and chief operating officer. The Hispanic marketing tool, which became available industrywide this month, gauges product volume and share data plus some display and merchandising activity at Hispanic-dominant stores in New York, Houston, Chicago, San Antonio, Los Angeles and Miami. The sample includes large chain and independent supermarkets as well as selected smaller independents.

"We now know which product moves, at what price point and when, and we can segment it by general population and Hispanic-dominant population stores," Bowlin said.

At the store level, that can help retailers better skew product selection, shelf quantities, advertising and in-store merchandising to Hispanic shoppers, he noted. "Together, we can work out more effective programming," he said.

"When we're executing [Hispanic-targeted] consumer promotions, we're able to determine which ones are particularly effective, and then we refine future ones to build on those successes," said Lou Nieto, director of ethnic marketing and external relations for Kraft Foods. "That lets a retailer know what consumer promotions to really get behind with heavy merchandising."

So far, Kraft has applied the measure to the following products, which have shown a strong demand among Hispanics: Post Banana Nut Crunch cereal, the entire line of Post children's ready-to-eat cereal (including staple items like Honey Combs and Fruity Pebbles), Kraft macaroni and cheese, Yuban coffee, Kraft Singles cheese, Oscar Mayer bologna and hot dogs, Knudsen sour cream and other dairy items.

"In 1996, I expect all of our brands to participate," Bowlin said, adding that Kraft Foods has 32 brands generating more than

$100 million in sales.

Kraft also is developing new items for the Hispanic market as a result of the data. "We've been working on products targeted to Hispanic consumers, and we just introduced a line of product into the Houston market," Nieto said, citing new sour cream and sweet toppings for Mexican dishes.

"The data has been a factor because it helps us monitor how much better particular product categories do among Hispanics," he explained. "That allows us to determine which niches are the right ones to enter."

Kraft previously had teamed with Nielsen to develop a measure of grocery purchases by the rapidly growing Hispanic market, coming out with one in 1992. However, Bowlin said, the tool reads scan data in Hispanic market areas. It couldn't identify Hispanic-dominant stores and only covered Los Angeles, Miami and San Antonio.

"We were spending [promotional] money in a market and didn't know whether it was working or not. We had anecdotal data, but we didn't have hard research. We were being torn in a lot of ways with where to spend our dollars," he explained.

"Now we have research to say we invested against target group A and store group B, and we get the following returns by target and by store group. And we're able to increase the investments where it works and change the investments where it's not working."

The new measure also is nationally representative of the Hispanic market, Nieto added. "The sample base is now large enough that we can project total national sales for each of our businesses," he said.

In one example of how the new tool has been used, the national campaign for Kraft Singles -- "A better cheese slice because of all that milk in there" -- was altered to "For the best cheese slices for quesadillas that your kids will love" for Hispanic-dominant stores, which boosted the product's sales at those locations, Bowlin said.