KRAFT IS EXPANDING ITS CO-MARKETING PROGRAMS

CAROL ANGRISANI

NORTHFIELD, Ill. -- Kraft Foods here has nearly tripled its co-marketing programs over the last year and plans to expand efforts even further in 1999.

The company is working with 165 accounts this year, up from 65 in 1997. Kraft expects to run a total of 400 co-marketing events in 1998, according to Kelly Cunningham, director of corporate promotions and co-marketing.

Cunningham addressed remarks on the expanded program to an audience at the Results-Oriented Account Specific & Co-Marketing Conference in San Francisco. The meeting was sponsored by the Institute for International Research, New York. The purpose of co-marketing is to promote Center Store, where Kraft does the bulk of its business, Cunningham said. The company intends to create a reputation as a provider of food solutions.

For instance, when Martin's Super Markets, South Bend, Ind., a member of Roundy's, Pewaukee, Wis., wanted to partner with the local high school, Kraft created a scholarship tied to back-to-school food solutions.

Another account, the Kroger Atlanta division, wanted a turnkey cross-department food-solution program that would leverage Kroger's "goodness" marketing program. The result was the "Goodness Made Easy" display program. The display consisted of racks and coolers containing products that could be assembled to make a dinner in 15 minutes. Kroger's private-label products were also featured prominently.

Similar programs have been developed for Albertson's and other large retailers, said Cunningham.

Kraft has modified its corporate structure to accommodate co-marketing. The company created a highly successful area marketing manager program. Under the initiative, nine employees have been moved from headquarters into different areas of the country to develop co-marketing programs with retailers.

"They get to interact not only with the retailer, but also with Kraft's customer business team," he said.

To enhance its co-marketing initiative, Kraft will launch co-op television ads next year. The 30-second commercials will combine the retailer's message with Kraft's. The first 10 seconds will be for Kraft, followed by about eight seconds for the retailer and then 12 seconds for Kraft.

"We felt it was important to integrate the retailer into our ads, not just put them at the end of the commercial," Cunningham said. Throughout November and December, Kraft will run co-op ads that align retailers with Second Harvest food bank.

While the company is described as a leader in co-marketing, Kraft feels there's still a lot of work to be done, Cunningham said. To help in this effort, it kicked off a $50 million advertising campaign two weeks ago to educate consumers about Kraft's many different brands, which include Oscar Mayer luncheon meats, Post cereal and Maxwell House coffee.

Kraft has conducted a great deal of consumer research over the last year to build its co-marketing programs. Among its consumer findings: mothers are the glue of the family -- they view food as a vehicle to get the family to connect. Their top priority is creating family time.

Kraft is using this consumer insight in its point-of-sale materials. "Our POS will show families reconnecting over food," Cunningham said.

Another finding was that consumers define their year by different seasons, and then by holidays. Many of its products -- including Stove Top stuffing, Cracker Barrel cheese, Jell-O and Philadelphia cream cheese -- fit into the consumer's lifestyle during the holidays. Kraft will recommend that such products be merchandised with complementary store-brand products.